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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
 
FORM
10-K
 
ANNUAL
REPORT
 


☒
ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
For
the Fiscal Year ended January 31, 2024.
 


☐
TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
Commission
File Number 1-7062
 
INNSUITES
HOSPITALITY TRUST
(Exact
name of registrant as specified in its charter)
 


Ohio
 
34-6647590

(State
                                            or other jurisdiction of
incorporation
    or organization)
 
(I.R.S.
                                            Employer
Identification
    Number)

 


InnSuites
                                            Hotels Centre
1730
    E. Northern Avenue, Suite 122
Phoenix,
    AZ 
 
85020

(Address
    of principal executive offices)
 
(ZIP
    code)

 
Registrant’s
telephone number, including area code: (602) 944-1500
 
Securities
registered pursuant to Section 12(g) of the Act: None
 
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
 
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
 
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
 
Indicate
by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ☒ No ☐
 
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ☐
 
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 


Large
    accelerated filer ☐
Accelerated
    filer ☐

 
 

Non-accelerated
    filer ☒
Smaller
    reporting company ☒

 
 

Emerging
    growth company ☐
 

 
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
 
If securities
are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. ☐
 
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis
of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period
pursuant to §240.10D-1(b). ☐
 
Aggregate
market value of Shares of Beneficial Interest held by non-affiliates of the registrant as of July 31, 2023, based upon the closing sales
price of the registrant’s Shares of Beneficial Interest on that date, as reported on the NYSE AMERICAN: $5,352,582.
 
Number
of Shares of Beneficial Interest outstanding as of April 8, 2024: 9,023,806
 
Documents
incorporated by reference: None.
 
Securities
registered pursuant to Section 12(b) of the Act:
 


Title
    of each class
 
Trading
    Symbol(s)
 
Name
    of each exchange on which registered

Shares
    of beneficial interest without par value
 
IHT
 
NYSE-American

 

 

 

 
 

 
PART
I
 
Item
1. BUSINESS
 
INTRODUCTION
TO OUR BUSINESS
 
InnSuites
Hospitality Trust (the “Trust”) is headquartered in Phoenix, Arizona and is an unincorporated Ohio real estate
investment trust formed on June 21, 1971. The Trust is not taxed as a real estate investment trust for federal taxation purposes but
is taxed as a C-corporation. The Trust, with its affiliate RRF Limited Partnership, a Delaware limited partnership (the “Partnership”),
owns interests in two hotels, operates and provides management services, and provides trademark license services, for two hotels. At
January 31, 2024, and currently, the Trust owns a 75.89% sole general partner interest in the Partnership, which controls a 51.62% interest
in the InnSuites hotel located in Tucson, Arizona, and a direct 21.90% interest in the InnSuites hotel located in Albuquerque, New Mexico.
The Tucson and Albuquerque hotels are sometimes referred to as the “Hotels”. We anticipate selling one or both
Hotels in the next twelve to thirty-six (12-36) months.
 
RRF
Limited Partnership, a 75.89% majority-owned subsidiary of the Trust, provides management services for the two Trust Hotels. The Trust
has approximately 52 full-time employees and approximately 27 part-time employees.
 
The
two Hotels have an aggregate of 270 hotel suites and operate as moderate-service hotels that apply a value studio and two-room suite
operating philosophy formulated in 1980 by Mr. James Wirth, President, the Trust’s Chairman, and Chief Executive Officer. The Trust
hotels offer services such as free hot breakfast plus amenities, such as microwave ovens, refrigerators, coffee makers, and free high-speed
Internet access.
 
For
the Fiscal Year 2025 ahead, February 1, 2024 through January 31, 2025, the Trust’s operations are focused on the Trust’s
primary business objective which is to maximize returns to its shareholders through increases in asset value and long-term total returns
to shareholders, including profitable hotel operations and sale of assets, along with growth of investments. The Trust seeks to achieve
this objective through intensive management and marketing of the InnSuites© Suite hotels, by even more profitable hotel operations,
selling hotel real estate at market prices well above book values and benefitting from diversified investments, including UniGen Power,
Inc. (UniGen). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Future
Positioning” for a more detailed discussion of the Trust’s strategic objectives.
 
The
Trust has a single class of Shares of Beneficial Interest, without par value, that are traded on the NYSE AMERICAN under the symbol “IHT.”
The Partnership has two outstanding classes of limited partnership interests, Class A and Class B, which are identical in all respects.
Both Class A and Class B Partnership Units are convertible, at the option of the holder, into one newly issued Share of Beneficial Interest
of the Trust.
 
MANAGEMENT
AND LICENSING CONTRACTS
 
The
Trust directly manages the Hotels through the Trust’s majority-owned subsidiary, RRF Limited Partnership. Under the management
agreements, RRF manages the daily operations of both Trust Hotels. All Trust managed Hotel expenses, revenues and reimbursements among
the Trust, and the Partnership have been eliminated in consolidation. The management fees for the Hotels are 5% of room revenue and a
monthly accounting fee of $2,000 per hotel. These agreements have no expiration dates but may be cancelled by either party with 30-days
written notice, or potentially sooner in the event the property changes ownership.
 
The
Trust also provides the use of the “InnSuites” trademark to the Hotels and stands ready to offer trademark services through
the Trust’s majority-owned subsidiary, RRF Limited Partnership, which is included in the management fee. The InnSuites trademark
expires in January 2027.
 

2
 

 

MEMBERSHIP
AGREEMENTS
 
Each
InnSuites Hotel has entered into membership agreements with Best Western International, Inc. (“Best Western”)
with respect to each of the two Hotels. In exchange for use of the Best Western name, trademark and reservation system, each Hotel pays
marketing and reservation fees to Best Western based on reservations received through the use of the Best Western reservation system,
a marketing fee based upon the monthly room revenues, and the number of available suites at the Hotels. The agreements with Best Western
are year-to-year. Best Western requires that the Hotels meet or exceed certain minimum requirements for room quality, and the two Hotels
are subject to removal from the Best Western reservation system if these requirements are not met. During the past year, the two Hotels
received significant reservations through the Best Western reservation system. Under these arrangements, fees paid for membership fees
and reservations were approximately $201,000 and $173,000, recorded in on the Consolidated Statement of Operations, for Fiscal Years
ended January 31, 2024, and 2023, respectively.
 
COMPETITION
IN THE HOTEL INDUSTRY
 
The
hotel industry is highly competitive. Both the Tucson and Albuquerque hotels experienced record high Gross Operating Profit (GOP Profits),
in Fiscal Year 2024 (February 1, 2023 to January 31, 2024), substantially higher than both Covid and Pre-Covid GOP Profits. This gross
operating profit is growing even more due to stringent cost control measures. The drastic impact of COVID-19 to the world economy and
hospitality industry resulted in severely reduced occupancy and significant reduction in room rates, both of which have now fully recovered.
Continued competition in corporate, leisure, group, and government business in the markets in which we operate, may affect our ability
to maintain room rates and maintain market share. Each of the Hotels faces competition primarily from other mid-market hotels located
in its immediate vicinity, but also competes with hotel properties located in other geographic markets, and increasingly from alternative
lodging facilities, such as Airbnb. While none of the Hotels’ competitors dominate any of their geographic markets, some of those
competitors may have greater marketing and/or financial resources than the Trust.
 
Certain
hotel property refurbishments have been completed by competitors in both Hotels’ markets, and additional hotel property developments
may be built in the future. Such hotel developments could have an adverse effect on the revenue of our Hotels in their respective markets.
 
The
Trust’s hotel investments are located in Arizona and New Mexico. With the completed renovations meeting Best Western standards
at our Tucson, Arizona and Albuquerque, New Mexico hotel properties, those hotels are expected to see incremental demand during the next
18 months. Supply has been relatively steady in those respective markets. Either an increase in supply or a decline in demand could result
in increased competition, which could have an adverse effect on occupancy, room rates and revenues of our Hotels in their respective
markets. The continued recovery has and is benefiting our hotels in the First Fiscal Quarter of 2025, (February 1, 2024 to April 30,
2024). This improvement and continued upward trend is expected to continue for the balance of Fiscal Year 2025, through January 31, 2025.
 
The
Trust may not invest further in hotels, but rather diversify into investments such as the investment made by the Trust in December 2019
in the innovative UniGen Power, Inc. (UniGen), efficient clean energy power generation company. The Trust may continue to seek further
diversification through a merger or reverse merger with a larger non-public entity seeking an NYSE-American public stock market listing.
 
REGULATION
 
The
Trust is subject to numerous federal, state, and local government laws and regulations affecting the hospitality industry, including
usage, building and zoning requirements and the laws and regulations related to the preparation and sale of food and beverage such as
health and liquor license laws. A violation of any of those laws and regulations or increased government regulation could require the
Trust to make unplanned expenditures which may result in higher operating costs. Compliance with these laws is time intensive and costly
and may reduce the Trust’s revenues and operating income.
 

3
 

 

Under
the Americans with Disabilities Act of 1990 (the “ADA”), all public accommodations are required to meet certain
readily achievable federal requirements related to access and use by disabled persons. In addition to ADA work completed to date, the
Trust may be required to remove additional access barriers or make unplanned, substantial modifications to its Hotels to further comply
with the ADA or to comply with other changes in governmental rules and regulations, or become subject to claims, fines, and damage awards,
any of which could reduce the number of total available rooms, increase operating costs, and/or have a negative impact on the Trust’s
results of operations.
 
Our
hotel properties are subject to various federal, state, and local environmental laws that impose liability for contamination. Under these
laws, governmental entities have the authority to require us, as the current or former owner of the property, to perform or pay for the
clean-up of contamination (including swimming pool chemicals or hazardous substances or biological waste) at or arising from the property
and to pay for natural resource damage arising from contamination. These laws often impose liability without regard to whether the owner
or operator knew of or caused the contamination. Such liability can be joint and several, so that each covered person can be responsible
for all the costs involved, even if more than one person may have been responsible for the contamination. We can also be liable to private
parties for costs of remediation, personal injury, death and/or property damage resulting from contamination at or originating from our
hotel properties. Moreover, environmental contamination can affect the value of a property and, therefore, an owner’s ability to
borrow funds using the property as collateral or to sell the property on favorable terms or at all. Furthermore, persons who sent waste
to a waste disposal facility, such as a landfill or an incinerator, may be liable for costs associated with cleanup of that facility.
 
The
Trust is also subject to laws governing our relationship with employees, including minimum wage requirements, overtime, working conditions
and work permit requirements. There are frequent proposals under consideration, at the federal and state levels, to increase the minimum
wage. The current labor market is tight, with employees increasingly difficult to recruit and retain. Additional increases to the state
or federal minimum wage rate, and employee benefit costs including health care or other costs associated with employees could increase
expenses and result in lower operating margins. This has been experienced somewhat due to the fact that industry labor is currently limited
and increasingly expensive.
 
The
Trust collects and maintains information relating to its guests for various business purposes, including maintaining guest preferences
to enhance the Trust’s customer service and for marketing and promotional purposes. The collection and use of personal data are
governed by privacy laws and regulations. Compliance with applicable privacy regulations may further increase the Trust’s operating
costs and/or adversely impact its ability to service its guests and market its products, properties, and services to its guests. In addition,
non-compliance with applicable privacy regulations by the Trust (or in some circumstances non-compliance by third parties engaged by
the Trust) could result in fines or restrictions on its use or transfer of data.
 
SEASONALITY
OF THE HOTEL BUSINESS
 
The
Hotels’ operations historically have been somewhat seasonal. The Tucson Arizona Hotel historically experiences the highest occupancy
in the first Fiscal Quarter (the winter high season) and, to a lesser extent, the fourth Fiscal Quarter. The second Fiscal Quarter (summer
low season) historically tends to be the lowest occupancy period at this Arizona Hotel. This seasonality pattern can be expected to cause
fluctuations in the Trust’s quarterly revenues. The Hotel located in Albuquerque, New Mexico historically experiences its most
profitable periods during the second and third Fiscal Quarters (the summer high season), providing some balance to the general seasonality
of the Trust’s hotel business.
 
The
seasonal nature of the Trust’s business increases its vulnerability to risks such as travel disruptions, labor force shortages
and cash flow issues. Further, if an adverse event such as an actual or threatened virus pandemic, terrorist attack, international conflict,
data breach, regional economic downturn or poor weather should occur at either of its two hotels, the adverse impact to the Trust’s
revenues and profit could be significant.
 
OTHER
AVAILABLE INFORMATION
 
We
also make available, free of charge, on our Internet website at www.innsuitestrust.com, our annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K and amendments to reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, as soon as reasonably practicable after we file such material with, or furnish it to, the Securities
and Exchange Commission (the “SEC”). Information on our Internet website shall not be deemed incorporated into,
or be part of, this report. This information is also available at SEC.gov.
 
Item
1A. RISK FACTORS
 
Not
required for smaller reporting companies.
 
Item
1B. UNRESOLVED STAFF COMMENTS
 
Not
required for smaller reporting companies.
 

4
 

 
Item
2. PROPERTIES
 
The
Trust maintains its administrative offices at the InnSuites Hotels Centre, at 1730 E. Northern Avenue, Suite 122, Phoenix, Arizona 85020
in a space leased by the Trust from a third party. The two Hotels are operated as InnSuites Hotels and Suites, and both Hotels are in
addition also marketed as Best Western® Hotels. The Hotels operate in the following locations:
 


 
●
Best
    Western InnSuites Tucson Foothills Hotel & Suites. 6201 N Oracle Rd., Tucson, AZ 85704 

 
●
Best
    Western InnSuites Albuquerque Airport Hotel & Suites. 2400 Yale Boulevard SE, Albuquerque, NM 87106

 
In
the last four years, we have we remodeled 100% of each property’s available suites and public areas. The Trust owns a direct 21.90%
interest in the InnSuites Hotel and Suites Albuquerque Airport Best Western Hotel. The Partnership owns a 51.62% interest in the InnSuites
Hotel and Suites Tucson Oracle Best Western Hotel. The Trust owns a 75.98% general partner interest in the Partnership.
 
See
“Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – General”
below for a discussion of occupancy rates at the Hotels.
 
See
Note 11 to the Trust’s Consolidated Financial Statements – “Mortgage Notes Payable” below for a discussion of
mortgages encumbering the Hotels.
 
See
Note 16 to the Trust’s Consolidated Financial Statements – “Leases” for a discussion of the lease for our corporate
headquarters and the non-cancellable ground lease to which our Albuquerque Hotel is subject.
 
Item
3. LEGAL PROCEEDINGS
 
The
Trust is not a party to, nor are any of its properties subject to, any material litigation or environmental regulatory proceedings. See
Note 20 to Trust’s Consolidated Financial Statements – “Commitments and Contingencies”.
 
Item
4. MINE SAFETY DISCLOSURES
 
Not
Applicable.
 
PART
II
 
Item
5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
The
Trust’s Shares of Beneficial Interest are traded on the NYSE American under the symbol “IHT.” On January 31, 2024,
the Trust had approximately 8,988,804 shares outstanding. As of April 8, 2024, there were approximately 328 holders of record of our
Shares of Beneficial Interest, not including holders who hold their asset positions with banks and brokers.
 

5
 

 

The
following table sets forth, for the periods indicated, the high and low sales prices of the Trust’s Shares of Beneficial Interest,
as reported on the NYSE American, as well as dividends declared thereon:
 


Fiscal Year 2024 
High  
Low  
Dividends 

First Quarter 
$1.83  
$1.80  
 - 

  
    
    
   

Second Quarter 
$3.82  
$3.08  
$0.01 

  
    
    
   

Third Quarter 
$2.33  
$1.98  
 - 

  
    
    
   

Fourth Quarter 
$1.92  
$1.69  
$0.01 

 


Fiscal Year 2023 
High  
Low  
Dividends 

First Quarter 
$4.34  
$3.77  
 - 

  
    
    
   

Second Quarter 
$3.77  
$2.99  
$0.01 

  
    
    
   

Third Quarter 
$3.74  
$2.84  
 - 

  
    
    
   

Fourth Quarter 
$3.71  
$2.96  
$0.01 

 
The
Trust has declared uninterrupted annual dividends for 54 years, since 1971, when the Trust was founded and first listed on the NYSE.
The Trust intends to maintain the current steady conservative dividend policy. The Trust currently is, and has, been paying two semiannual
dividends each Fiscal Year totaling $0.02 per share per Fiscal Year. In the Fiscal Years ended January 31, 2024 and 2023, the Trust paid
dividends of $0.01 per share per share in each of the first and second quarters. The Trust has paid uninterrupted annual dividends each
Fiscal Year since its inception in 1971. The Trust paid the semiannual dividend of $0.01 on February 5, 2024, and currently intends to
pay the scheduled semiannual $0.01 dividend payable on July 31, 2024 at NYSE American.
 

6
 

 
See
Part III, Item 12 for information about our equity compensation plans.
 
See
Note 2 to our Consolidated Financial Statements – “Summary of Significant Accounting Policies” for information related
to grants of restricted shares made to members of our Board of Trustees during Fiscal Year 2023. These grants were made in reliance upon
the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”),
pursuant to Section 4(a)(2).
 
No
stock option grants were made in Fiscal 2023 or 2024.
 
Item
6. SELECTED FINANCIAL DATA
 
Not
required for smaller reporting companies.
 

Item
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
GENERAL
 
The
following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in
this Form 10-K.
 
We
are engaged in the ownership and operation of hotel properties. At January 31, 2024, the Trust had two moderate-service hotels, one in
Tucson, Arizona and one in Albuquerque, New Mexico with 270 hotel suites. Both of our Trust Hotels are branded through membership agreements
with Best Western, and both are also trademarked as InnSuites Hotels and Suites. We are also involved in various operations incidental
to the operation of hotels, such as the operation of a limited service restaurant, and bar, as well as meeting/banquet room rentals.
 
At
January 31, 2024, and currently, the Trust owns a 75.89% sole general partner interest in the Partnership, which controls a 51.62% interest
in the InnSuites hotel located in Tucson, Arizona, and a direct 21.90% interest in the InnSuites hotel located in Albuquerque, New Mexico.
 
Trust
operations consist of one reportable segment – Hotel Ownership & Hotel Management Services. Hotel Ownership Operations derives
its revenue from the operation of the Trust’s two hotel properties with an aggregate of 270 hotel suites in Arizona and New Mexico.
Hotel management services, provides management services for the Trust’s two Hotels. As part of our management services, we also
provide trademark and licensing services.
 
The
Trust has chosen to focus its hotel investments on the southwest region of the United States. The Trust does not review assets by geographical
region; therefore, no income statement or balance sheet information by geographical region is provided.
 
Our
results are significantly affected by the overall economy and travel, occupancy and room rates at the Hotels, our ability to manage costs,
changes in room rates, and changes in the number of available suites caused by the Trust’s disposition activities. Results are
also significantly impacted by overall economic conditions and conditions in the travel industry. Unfavorable changes in these factors,
such as the virus-related travel slowdown in the Fiscal Year starting February 1, 2020, can and have negatively impacted hotel room demand
and pricing, which reduces our profit margins. Additionally, our ability to manage costs could be adversely impacted by significant inflationary
increases in operating expenses, resulting in lower operating margins, and higher hourly labor costs. Further increases in area hotel
supply, hourly labor cost, declines in demand, or declines in room rates, could result in increased competition, which could have an
adverse effect on the rates, revenue, costs, and profits of the Hotels in their respective markets.
 
Over
time, we expect our UniGen diversification efficient clean energy generation investment to grow and provide a substantial source of income
in the future.
 
We
expect the current Fiscal Year 2025 to be continued growth of the travel industry, stable high level Hotel occupancy, continued recovery and increases of room rates, as well as continuation of current cost control all leading to improved profitability
of our hotels. We believe that we have positioned the Hotels to remain competitive through our now fully completed Tucson and Albuquerque
hotel refurbishments, by offering fully refurbished studios and two-room suites at each location, and by maintaining complementary guest
items, including complimentary hot breakfast and free Internet access.
 
Our
strategic plan is to continue to obtain the full benefit of our real estate equity, by ultimately obtaining full market value for our
two Hotels at market value, which is believed by management to be substantially higher than lower book values, over the next 12-36 months.
In addition, the Trust is seeking a larger private reverse merger partner that may benefit from a merger that would afford that partner
access to our listing on the NYSE AMERICAN.
 
In
the process of reviewing merger opportunities, the Trust identified in December 2019, and invested $1 million in UniGen Power, Inc.
(“UniGen”), an innovative efficient clean energy power generation company. The Trust has invested $1 million in
debentures convertible into 1 million shares of UniGen Power Inc., the Trust has invested in 540,000 UniGen shares, and in addition
has acquired warrants to purchase approximately an additional 2 million UniGen shares over the next approximately three years, which
could result in 20% or more ownership in UniGen. For more information on our strategic plan, including information on our progress
in disposing of our hotel properties and expanding energy diversification, see “Future Positioning” in this Management
Discussion and Analysis of Financial Condition and Results of Operations.
 
We
expect the current Fiscal Year 2025 to continue strong for the travel industry, with a stable high level occupancy and room rates, as
well as continuation of current cost control all leading to improved profitability of our hotels. We believe that we have positioned
the Hotels to remain competitive through our now fully completed Tucson and Albuquerque hotel refurbishments, by offering fully refurbished
studios and two-room suites at each location, and by maintaining complementary guest items, including complimentary hot breakfast and
free high-speed Internet access.
 

7
 

 
Our
strategic plan is to continue to obtain the full benefit from hotel operations, and from our real estate equity, by marketing the remaining
two Hotels over the next 12-36 months. In addition, the Trust is seeking a larger private reverse merger partner that may benefit from
a merger that would afford that partner access to our listing on the NYSE AMERICAN. In the process of reviewing merger opportunities,
the Trust identified and invested $1 million in UniGen Power, Inc. (“UniGen”), an innovative efficient clean energy power
generation company. The Trust has invested $1 million debentures convertible into 1 million shares of UniGen Power Inc., has purchased
approximately 540,000 UniGen shares, and in addition has acquired warrants to purchase approximately an additional 2 million UniGen shares
over the next three years, which could result up to 20% or more ownership in UniGen. For more information on our strategic plan, including
information on our progress in disposing of our hotel properties and expanding energy diversification, see “Future Positioning”
in this Management Discussion and Analysis of Financial Condition and Results of Operations.
 
Our
expenses consist primarily of property taxes, insurance, corporate overhead, interest on mortgage debt, professional fees, non-cash depreciation
of the Hotels and hotel operating expenses. Hotel operating expenses consist primarily of payroll, guest and maintenance supplies, marketing,
and utilities expenses. Management believes that a review of the historical performance of the operations of the Hotels, particularly
with respect to Occupancy, which is calculated as rooms sold divided by total rooms available, average daily rate (“ADR”),
calculated as total room revenue divided by number of rooms sold, and revenue per available room (“REVPAR”),
calculated as total room revenue divided by number of rooms available, is appropriate for understanding revenue from the Hotels. In Fiscal
Year 2024, as compared with Fiscal 2023, occupancy increased approximately 1.95% to 75.91% from 73.96% in the prior Fiscal Year. ADR
increased by $1.80, or 1.88%, to $97.46 in Fiscal Year 2024 from $95.66 in Fiscal Year 2023. The increased ADR resulted in an increase
in REVPAR of $3.23, or 4.57%, to $73.98 in Fiscal Year 2024 from $70.75 in Fiscal Year 2023. The increase in ADR and REVPAR reflect the
increased travel and improved economy.
 
For
the Fiscal Year 2024, ending January 31, 2024, we experienced a substantial profit improvement. For Fiscal 2025, (February 1, 2024 to
January 31, 2025), we expect continued  increase in rates, and continued increased record profits and revenues compared to both
prior levels.
 
For
the 2023 Fiscal Year (February 1, 2022 to January 31, 2023), which was a rebound from the previously adversely affected Fiscal Year 2022
(February 1, 2021 to January 31, 2022), by the Covid pandemic, InnSuites and the entire hotel industry in general experienced
strong improvements and increased travel, resulting in much higher revenues and profits. For the 2024 Fiscal Year ended January 31, 2024,
InnSuites  continued this
upward trend achieving record profits.
 
The
following table shows certain historical financial and other information for the periods indicated:
 


  
For the Years Ended 

Albuquerque 
January 31, 

  
2024  
2023  
Change  
%-Incr/Decr 

Occupancy 
 84.86% 
 82.27% 
 2.59% 
 3.15%

Average Daily Rate (ADR) 
$99.97  
$98.90  
$1.07  
 1.08%

Revenue Per Available Room (REVPAR) 
$84.84  
$81.36  
$3.48  
 4.28%

 


  
For the Years Ended 

Tucson 
January 31, 

  
2024  
2023  
Change  
%-Incr/Decr 

Occupancy 
 69.56% 
 68.07% 
 1.49% 
 2.19%

Average Daily Rate (ADR) 
$95.29  
$92.88  
$2.41  
 2.59%

Revenue Per Available Room (REVPAR) 
$66.28  
$63.22  
$3.06  
 4.84%

 


  
For the Years Ended 

Combined 
January 31, 

  
2024  
2023  
Change  
%-Incr/Decr 

Occupancy 
 75.91% 
 73.96% 
 1.95% 
 2.64%

Average Daily Rate (ADR) 
$97.46  
$95.66  
$1.80  
 1.88%

Revenue Per Available Room (REVPAR) 
$73.98  
$70.75  
$3.23  
 4.57%

 

8
 

 

No
assurance can be given that occupancy, ADR and/or REVPAR will or will not increase or decrease as a result of changes in national or
local economic travel, or hospitality industry conditions.
 
We
enter into transactions with certain related parties from time to time. For information relating to such related party transactions see
the following:
 


 
●
    
For
    a discussion of management and licensing agreements with certain related parties, see “Item 1 – Business – Management
    and Licensing Contracts.”

 
 
 

 
●
For
    a discussion of guarantees of our mortgage notes payable by certain related parties, see Note 11 to our Consolidated Financial Statements
    – “Mortgage Notes Payable.”

 
 
 

 
●
    
For
    a discussion of our equity sales and restructuring agreements involving certain related parties, see Notes 3, and 4 to our Consolidated
    Financial Statements – “Sale of Ownership Interests in Albuquerque Subsidiary,” and “Sale of Ownership Interests
    in Tucson Hospitality Properties Subsidiary,” respectively.

 
 
 

 
●
For
    a discussion of other related party transactions, see Note 19 to our Consolidated Financial Statements – “Other Related
    Party Transactions.”

 
Results
of operations of the Trust for the Fiscal Year ended January 31, 2024 compared to the Fiscal Year ended January 31, 2023.
 
Overview
 
A
summary of total Trust operating results for the Fiscal Years ended January 31, 2024 and 2023 is as follows:
 


  
For Years Ended January 31,  
   
  

  
2024  
2023  
Change  
% Change 

Total Revenues 
$7,484,398  
$7,145,687  
$338,711  
 5%

Operating Expenses 
 8,205,374  
 7,443,022  
 762,352  
 10%

Operating Loss 
 (720,976) 
 (297,335) 
 (423,641) 
 (142%)

Interest Income and Other 
 96,595  
 68,072  
 28,523  
 42%

Interest Expense 
 (501,707) 
 (530,347) 
 28,640  
 5%

Employee Retention Benefit 
 1,403,164  
 1,403,164  
 -  
 0%

Income Tax Benefit 
 100  
 93,497  
 (93,397) 
 (100%)

Consolidated Net Income 
 277,176  
 737,051  
 (459,875) 
 (62%)

 
REVENUE
 
For
the twelve months ended January 31, 2024, we had total revenue of approximately $7,484,000 compared to approximately $7,146,000 for the
twelve months ended January 31, 2023, an increase of approximately $339,000, or 5%.
 
We
realized a 5% increase in room revenues during Fiscal Year 2024 as room revenues were approximately $7,292,000 for the Fiscal Year ending
January 31, 2024 as compared to approximately $6,974,000 for the Fiscal Year ending January 31, 2023. While room revenue increased, our
food and beverage revenue remained flat for Fiscal Year 2024 at approximately $114,000 during Fiscal Years 2024. Management fees were
approximately $79,000 for the Fiscal Year ending January 31, 2024 as compared to approximately $53,000 for the Fiscal Year ending January
31, 2023.
 

9
 

 
EXPENSES
 
Total
expenses before interest expense, employee retention credit, sales and occupancy taxes and income tax provision were approximately $8,205,000
for the twelve months ended January 31, 2024 reflecting an increase of approximately $762,000 compared to total expenses before interest
expense, employee retention credit, sales and occupancy taxes and income tax provision of approximately $7,443,000 for the twelve months
ended January 31, 2023. The increase was primarily due to an increase in room expenses and general and admirative expenses. Specific
expense comparisons to the prior Fiscal Year are detailed in the following categories.
 
Room
expenses consisting of salaries and related employment taxes for property management, front office, housekeeping personnel, reservation
fees and room supplies were approximately $2,525,000 for the Fiscal Year ended January 31, 2024 compared to approximately $2,222,000
in the prior year period for an increase of approximately $303,000, or 14%. Room expenses increased as occupancy at the hotels increased,
and increased expenses were incurred with the increased occupancy.
 
General
and administrative expenses include overhead charges for management, accounting, shareholder, and legal services. General and administrative
expenses of approximately $2,470,000 for the twelve months ended January 31, 2024, increased approximately $244,000 from approximately
$2,227,000 for the twelve months ended January 31, 2023 primarily due to increases in minimum wage laws affecting a majority of our employees,
creating higher personnel costs along with increased employment taxes, accordingly.
 
Sales
and marketing expense decreased approximately $43,000, or 9%, to approximately $409,000 for the twelve months ended January 31, 2024
from approximately $451,000 for the twelve months ended January 31, 2023. Vacant positions for sales and marketing resources accounted
for the increase.
 
Repairs
and maintenance expense increased by approximately $54,000, or 13%, to approximately $466,000 for the twelve months ended January 31,
2024 from approximately $413,000 for the twelve months ended January 31, 2023. Having completed the property improvements at our Tucson,
Arizona hotel Management anticipates the improvements which complies with the increasing Best Western standards, will (after the adverse
effects of travel restrictions and slowdown), lead to improvement in guest satisfaction and will drive additional revenue growth through
increased occupancy and increased rates in the year ahead.
 
Hospitality
expense increased by approximately $92,000, or 25%, to approximately $459,000 for the twelve months ended January 31, 2024 from approximately
$368,000 for the twelve months ended January 31, 2023. The increase was primarily due to the increased occupancy and increased breakfast
offerings at the hotel properties due to previous pandemic restrictions no longer in effect.
 
Utility
expenses decreased approximately $5,000, or 1%, to approximately $423,000 reported for the twelve months ended January 31, 2024 from
approximately $428,000 for the twelve months ended January 31, 2023.
 
Hotel
property depreciation expenses decreased by approximately $23,000 to approximately $679,000 for the twelve months ended January 31, 2024
from approximately $702,000 for the twelve months ended January 31, 2023. Decreased depreciation resulted from the capital expenditures
being fully depreciated, and thus less expense was incurred and recorded.
 
Real
estate and personal property taxes, Insurance and Ground Rent expenses increased approximately $124,000, or 29%, to approximately $553,000
for the twelve months ended January 31, 2024 from approximately $429,000 for the twelve months ended January 31, 2023.
 

10
 

 

Employment
Tax Refunds and Credits, for the previously filed calendar years 2021, and 2022, respectively, resulted in the Employment Retention
Tax Credit. As a result, the Trust quantifiably placed an amount equal to approximately 12% per Fiscal Quarter of this total as a
Tax Credit Receivable and Tax Refund on the Balance Sheet and Income statement, respectively, for the Fiscal Years ended January 31,
2024 and 2023, respectively.
 
LIQUIDITY
AND CAPITAL RESOURCES
 
Overview
– Hotel Operations & Corporate Overhead
 
Two
principal sources of cash to meet our cash requirements, include monthly management fees from our two hotels and distributions of our
share of the Partnership’s cash flow of the Tucson hotel and quarterly distributions from the Albuquerque, New Mexico properties.
Additional sources of cash include intercompany loan repayments, potential future real estate hotel sales, and potential returns on diversified
investments. The Partnership’s principal source of revenue is hotel operations for the hotel property it owns in Tucson, Arizona.
Our liquidity, including our ability to make distributions to our shareholders, will depend upon our ability, and the Partnership’s
ability, to generate sufficient cash flow from hotel operations, from management fees, and from the potential sale and/or refinance of
the hotel, and to service our debt including repayment of intercompany loan from Tucson.
 
Hotel
operations were positively affected by increased room rates at the Hotels in the Fiscal Years 2023 and 2024, respectively, as the travel
industry continued to rebound.
 
With
approximately $1,325,000 of cash as of January 31, 2024 and the availability of a $250,000 bank lines of credit, an up to $2,000,000
related party Demand/Revolving Line of Credit/Promissory Note, and the availability of repayment of Advances to Affiliate credit facilities
and available Bank line of Credit, we believe that we will have enough cash on hand to meet all of our financial obligations as they
become due for at least the next twelve months and beyond, from the issuance date of the these consolidated financial statements. Our
management is analyzing other strategic options available to us, including raising additional funds, asset sales, and benefiting from
clean energy investment cash flow as our diversification investment matures. However, such transactions may not be available on terms
that are favorable to us, or at all.
 
IHT
and InnDependent Boutique Collections Hotels (IBC), agreed to extend the payment schedule on IBC’s note receivable to allow IBC
to fully use its revenues to build market share as the hotel industry rebounds. Management believes that with an additional extension
repayment term, that the future collectability of the current carrying value of the note is probable and not subject to further impairment,
or allowance for the Fiscal Year ended January 31, 2024.
 
Refer
to Note 6 – “Note Receivable” for information related to the Sale of IBC Hospitality Technologies (IBC).
 
There
can be no assurance that we will be successful fully collecting receivables, in refinancing debt, or raising additional or replacement
funds, or that these funds may be available on terms that are favorable to us. If we are unable to raise additional or replacement funds,
we may be required to sell certain of our assets to meet our liquidity needs, which may not be on terms that are favorable.
 

11
 

 

We
anticipate limited additional new-build hotel supply in our markets during the current Fiscal Year 2025, and accordingly we
anticipate a continued increase of revenues and operating margins. We expect challenges for the remaining Fiscal Year to be the
economy, inflation, and cost control. Travel, leisure, corporate, group, and government business continued  to grow and
further increase room rates while maintaining and/or building market share in Fiscal Year 2024.
 
Positive
cash provided by operating activities totaled approximately $1,432,000 during the twelve months ended January 31, 2024 as compared to
net cash provided of approximately $54,000 during the twelve months ended January 31, 2023. Consolidated net income was approximately
$277,000 for the twelve months ended January 31, 2024 as compared to consolidated net income for the twelve months ended January 31,
2023 of approximately $737,000. Explanation of the differences between these Fiscal Years are explained above in the results of operations
of the Trust.
 
The
Trust’s Management received communication from the NYSE-American on August 29, 2022, indicating IHT is fully compliant with all
of the Continued Listing Standards Equity Requirements set forth in Part 10 of the NYSE American Company Guide, of the NYSE-American.
 
NON-GAAP
FINANCIAL MEASURES
 
The
following non-GAAP presentations of earnings before interest, taxes, non-cash depreciation, and amortization (“EBITDA”)
and funds from operations (“FFO”) are made to assist our investors in evaluating our operating performance.
 
Adjusted
EBITDA is defined as earnings before interest expense, amortization of loan costs, interest income, income taxes, depreciation and amortization,
and non-controlling interests in the Trust. We present Adjusted EBITDA because we believe these measurements (a) more accurately reflect
the ongoing performance of our hotel assets and other investments, (b) provide more useful information to investors as indicators of
our ability to meet our future debt payments and working capital requirements, and (c) provide an overall evaluation of our financial
condition. Adjusted EBITDA as calculated by us may not be comparable to Adjusted EBITDA reported by other companies that do not define
Adjusted EBITDA exactly as we define the term. Adjusted EBITDA does not represent cash generated from operating activities determined
in accordance with GAAP and should not be considered as an alternative to (a) GAAP net income or loss as an indication of our financial
performance or (b) GAAP cash flows from operating activities as a measure of our liquidity.
 

12
 

 

A
reconciliation of Adjusted EBITDA to net loss attributable to controlling interests for the Fiscal Years ended January 31, 2024 and 2023
approximate follows:
 


  
For the Years Ended January 31, 

  
2024  
2023 

Net income attributable to controlling interests 
$204,000  
$523,000 

Add back: 
    
   

Depreciation 
 679,000  
 702,000 

Interest expense 
 502,000  
 530,000 

Less: 
    
   

Interest Income 
 (50,000) 
 (68,000)

Adjusted EBITDA 
$1,335,000  
$1,687,000 

 
FFO
is calculated on the basis defined by the National Association of Real Estate Investment Trusts (“NAREIT”),
which is net income (loss) attributable to common shareholders, computed in accordance with GAAP, excluding gains or losses on sales
of properties, asset impairment adjustments, and extraordinary items as defined by GAAP, plus non-cash depreciation and amortization
of real estate assets, and after adjustments for unconsolidated joint ventures and non-controlling interests in the operating partnership.
NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically
has not depreciated on the basis determined by GAAP. The Trust is an unincorporated Ohio business investment, (real estate investment
trust); however, the Trust is not a real estate investment trust for federal taxation purposes. Management uses this measurement to compare
itself to REITs with similar depreciable assets. We consider FFO to be an appropriate measure of our ongoing normalized operating performance.
We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported
by other companies that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition
differently than us. FFO does not represent cash generated from operating activities as determined by GAAP and should not be considered
as an alternative to (a) GAAP net income or loss as an indication of our financial performance or (b) GAAP cash flows from operating
activities as a measure of our liquidity, nor is it indicative of funds available to satisfy our cash needs, including our ability to
make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO should
be considered along with our net income or loss and cash flows reported in the consolidated financial statements.
 
A
reconciliation of FFO to net income (loss) attributable to controlling interests for Fiscal Year ended January 31, 2024 and 2023 are
as follows:
 


  
For the Years Ended January 31, 

  
2024  
2023 

Net income attributable to controlling interests 
$204,000  
$523,000 

Add back: 
    
   

Depreciation 
 679,000  
 702,000 

Non-controlling interest 
 73,000  
 214,000 

FFO 
$956,000  
$1,439,000 

 
The
Trust reported Consolidated Net Loss from operations of approximately $721,000 for the Fiscal Year ended January 31, 2024 compared
to Consolidated Net Loss from operations before other income, interest expense, and the Employee Retention Credit of approximately
$297,000 for the Fiscal Year ended January 31, 2023. Fiscal 2024 and 2023 Consolidated Net Loss from operations included non-cash
depreciation of approximately $679,000 and $702,000, respectively. Fiscal 2024 Consolidated Net Income from operations before
non-cash depreciation was approximately $883,000 as compared to Consolidated Net Income from operations before non-cash depreciation
of approximately $1,226,000 for Fiscal 2023.
 

13
 

 
FUTURE
POSITIONING
 
In
viewing the hotel industry cycles, reconfirmed by the recent disruption of travel and hospitality, the Board of Trustees determined that
it was appropriate to continue to actively seek buyers for our two remaining Hotel properties. We continue to make our Tucson Hotel and
Albuquerque Hotel available for sale at market value, on the website www.suitehotelsrealty.com.
 
The
table below provides book values, mortgage balances and Estimated Market Asking Price for the Hotels.
 


Hotel Property 
Book Value  
Mortgage Balance  
Estimated MarketAsking Price 

Albuquerque 
$987,000  
$1,204,000  
 9,500,000 

Tucson Oracle 
 6,028,000  
 8,046,000  
 18,500,000 

  
$7,015,000  
$9,250,000  
$28,000,000 

 
The
“Estimated Market Asking Price” is the amount at which we believe we may sell each of the Hotels and is adjusted to reflect
hotel sales in the Hotels’ areas of operation and projected upcoming strong 12 month earnings of each of the Hotels. The Estimated
Market Asking Price is not based on appraisals of the properties.
 
We
have from time to time listed hotel properties with a long time highly successful local real estate hotel broker who has successfully
sold four of our hotel properties. We believe that each of the assets, the Tucson and Albuquerque hotels, have an estimated market asking
price that is reasonable in relation to its current fair market value. We plan to sell our remaining two Hotel properties within 12-36
months. We can provide no assurance that we will be able to sell either or both of the Hotel properties on terms favorable to us or within
our expected time frame, or at all.
 
Our
long-term strategic plan is to obtain the full benefit of our real estate equity, to benefit from our UniGen Power, Inc., (UniGen) clean
energy operation diversified investment, and to pursue a merger with another company, likely a private larger entity that seeks to go
public to list on the NYSE AMERICAN Exchange.
 
SHARE
REPURCHASE PROGRAM
 
For
information on the Trust’s Share Repurchase Program, see Part II, Item 5. “Market for the Registrant’s Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities.” We plan to continue the stock and partnership unit buy
backs in the current Fiscal Year 2025.
 
OFF-BALANCE
SHEET ARRANGEMENTS
 
We
do not have any off-balance sheet financing arrangements or liabilities. We do not have any majority-owned or controlled subsidiaries
that are not included in our consolidated financial statements.
 
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
 
As
a partial balance to the current hotel industry, the Trust looks to benefit from, and expand, its UniGen clean energy operation diversification
investments in the years ahead. See Note 7 of the Audited Consolidated Financial Statements for discussion on UniGen.
 
Asset
Impairment
 
We
believe that the policies we follow for the valuation of our hotel properties, which constitute the majority of our assets, are our most
critical policies. The Financial Accounting Standards Board (“FASB”) has issued authoritative guidance related to the impairment
or disposal of long-lived assets, codified in ASC Topic 360-10-35, which we apply to determine when it is necessary to test an asset
for recoverability. On an events and circumstances basis, we review the carrying value of our hotel properties. We will record an impairment
loss and reduce the carrying value of a property when anticipated undiscounted future cash flows and the current market value of the
property do not support its carrying value. In cases where we do not expect to recover the carrying cost of hotel properties held for
use, we will reduce the carrying value to the fair value of the hotel, as determined by a current appraisal or other acceptable valuation
methods. We did not recognize a hotel properties impairment loss in Fiscal Years 2024 or 2023. As of January 31, 2024, our management
does not believe that the carrying values of any of our hotel properties are impaired.
 

14
 

 

Sale
of Hotel Assets
 
Management
believes that our currently owned Hotels are valued at prices that are reasonable in relation to their current fair market value. At
this time, the Trust is unable to predict when, and if, either of its Hotel properties will be sold. The Trust seeks to sell both hotels
over the next 12-36 months. We believe that each of the assets is available at a price that is reasonable in relation to its current
fair market value. The plan is to work to sell the remaining two hotel properties over the next 12-36 months, and if needed beyond.
 
Revenue
Recognition
 
Revenues
are primarily derived from the sources below and are recognized as services are rendered and when collectability is reasonably assured.
Amounts received in advance of revenue recognition are considered deferred liabilities and are generally not significant.
 
Revenues
primarily consist of room rentals, food and beverage sales, management and trademark fees and other miscellaneous revenues from our properties.
Revenues are recorded when rooms are occupied and when food and beverage sales are delivered.
 
Each
room night consumed by a guest with a cancelable reservation represents a contract whereby the Trust has a performance obligation to
provide the room night at an agreed upon price. For cancellable reservations, the Trust recognizes revenue as each performance obligation
(i.e., each room night) is met. Such contract is renewed if the guest continues their stay. For room nights consumed by a guest with
a non-cancellable reservation, the entire reservation period represents the contract term whereby the Trust has a performance obligation
to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Trust recognizes revenue over the
term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically
fixed over the reservation period. The Trust uses an output method based on performance completed to date (i.e., room nights consumed)
to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since
consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist
with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout.
 
In
evaluating its performance obligation, the Trust bundles the obligation to provide the guest the room itself with other obligations (such
as free Wi-Fi, grab and go or hot breakfast, access to on-site laundry facilities and parking), as the other obligations are not distinct
and separable because the guest cannot benefit from the additional amenities without the consumed room night. The Trust’s obligation
to provide the additional items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing
the room and its contents). The Trust has no performance obligations once a guest’s stay is complete.
 
We
are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable
governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and
fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability
when payments are made to the applicable taxing authority or other appropriate governmental agency.
 
SEASONALITY
 
See
Item 1 for related discussion of seasonality.
 

15
 

 

INFLATION
 
We
rely entirely on the performance of the Hotels and InnSuites ability to increase revenue to keep pace with inflation. Operators of
hotels in general, and InnSuites in particular, can change and do change room rates often and quickly, but competitive pressures may
limit InnSuites ability to raise rates as fast as or faster than inflation. During Fiscal Year 2024, ended January 31, 2024,
InnSuites did experience substantial increases in rates to offset the inflationary increase labor and other expenses. During the
current Fiscal 2025, rates continue to increase although at a slower pace than the prior Fiscal Year.
 
INVESTMENT
IN UNIGEN POWER, INC.
 
On
December 16, 2019, the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. (“UniGen”). InnSuites
Hospitality Trust (IHT) made an initial $1 million diversification investment in late Fiscal Year 2020 and early Fiscal Year 2021. UniGen
is in the process of developing a patented high profit potential new efficient clean energy generation innovation. The initial investment
was made December 16, 2019, with positive progress to date despite the virus, economic setbacks, international vendor travel disruptions,
cost overruns, and delays. The investment includes convertible bonds, stocks, and warrants to purchase UniGen stock upon election of
the Trust. The investment is valued at fair value (level 3), as defined in Note 2 of the Consolidated Financial Statements. There is
no Investment Commitment to UniGen requiring any restriction of cash.
 
The
Trust purchased secured convertible debentures (“Debentures”) in the aggregate amount of $1,000,000 (the “Loan Amount”)
(the “Loan”) at an annual interest rate of 6% ($15,000 per quarter). The Debentures are convertible into 1,000,000 Class
A shares of UniGen Common Stock at an initial conversion rate of $1.00 per share.
 
The
Trust has purchased in addition approximately 540,000 shares of UniGen stock.
 
UniGen
issued the Trust common stock purchase warrants (the “Debenture Warrants”) including to purchase up to 1,000,000 shares of
Class A Common Stock. The Debenture Warrants are exercisable at an exercise price of $1.00 per share of Class A Common Stock.
 
UniGen,
also, issued the Trust additional common stock purchase warrants (“Additional Warrants”) to purchase up to 500,000 shares
of Class A Common Stock. The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock.
 
UniGen
has agreed to allow IHT to fund a $500,000 line of credit at the option of IHT convertible into 500,000 shares of UniGen stock at $1
per share. Currently, there is no outstanding balance at this time.
 
The
total of all stock ownership upon conversion of the debenture and exercise of warrants could total up to 3 million UniGen shares,
which amounts to approximately 20% or more of fully diluted UniGen equity.
 
On
the Trust’s balance sheet, the investment of the $1,633,750 consists of approximately $700,000 in note receivables, approximately
$300,000 as the fair value of the warrants issued with the Trust’s investment in UniGen, and $633,750 of UniGen Common Stock (540,000
shares), at cost. The value of the premium related to the fair value of the warrant will accrete over the life of the debentures.
 

16
 

 
Privately
held UniGen Power, Inc. (UniGen) is developing a patented high profit potential new efficient clean energy generation innovation. The
investment is valued at fair value (level 3), as defined in Note 2 of the Consolidated Financial Statements. There is no Investment Commitment
to UniGen requiring any restriction of cash.
 
Engineering
work is largely complete on the prototype and has been placed on hold, while UniGen concentrates on its current round of capital raising.
IHT may participate in the upcoming round of capital raising including through the exercise of existing warrants, or purchase of additional
convertible debentures.
 
UniGen
is a high risk investment offering high potential investment return if and when successful.
 
Based
on a 96 core “super computer “ simulated test together with advanced software, UniGen has confirmed that the UPI 1000TA
engine with the addition of recent potential technological advancements, is approximately 33% more fuel efficient than first
estimated and will emit only approximately 25% of the maximum admissions allowed by CARB, the strictest of the regulatory standards
issued by the state of California.
 
The
UniGen design is to produce generators fueled not only with abundant relatively clean natural gas but also with other even cleaner fuels
such as ethanol and hydrogen (that emits only water).
 
James
Wirth (IHT President) and Marc Berg (IHT Executive Vice President) both lack significant UniGen control. They have two of the seven UniGen
Board of Directors seats or 28% and were elected in December 2019 to serve on the board of UniGen to  monitor and assist in the
success of this potentially power industry disruptive relatively clean energy generation innovation.
 
The
Trust has valued UniGen investment as a level 3 fair value measurement, for the following reasons: The investment does not qualify for
level 1 since there are no identical actively traded instruments or level 2 identical or similar unobservable markets.
 
FORWARD-LOOKING
STATEMENTS
 
Certain
statements in this Form 10-Q, including statements containing the phrases “believes,” “intends,” “expects,”
“anticipates,” “predicts,” “projects,” “will be,” “should be,” “looking
ahead,” “may” or similar words, constitute “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend that such forward-looking
statements be subject to the safe harbors created by such Acts. These forward-looking statements include statements regarding our intent,
belief or current expectations in respect of (i) the declaration or payment of dividends; (ii) the leasing, management or operation of
the Hotels; (iii) the adequacy of reserves for renovation and refurbishment; (iv) our financing plans; (v) our position regarding investments,
acquisitions, developments, financings, conflicts of interest and other matters; (vi) expansion of UniGen; (vii) our plans and expectations
regarding future sales of hotel properties; and (viii) trends affecting our or any Hotel’s financial condition or results of operations.
 
These
forward-looking statements reflect our current views in respect of future events and financial performance, but are subject to many uncertainties
and factors relating to the operations and business environment of the Hotels and our other investments, that may cause our actual results
to differ materially from any future results expressed or implied by such forward-looking statements. Examples of such uncertainties
include, but are not limited to:
 


 
●
Virus
    Pandemic and its effect on the Travel Industry;

 
 
 

 
●
potential
    risk of investments, including the investment in UniGen;

 
 
 

 
●
inflation
    and economic recession;

 
 
 

 
●
terrorist
    attacks or other acts of war;

 
 
 

 
●
political
    instability;

 
 
 

 
●
available
    cash, supply chain issues, and increased labor costs for diversified clean energy development and production;

 
 
 

 
●
fluctuations
    in hotel occupancy rates;

 
 
 

 
●
changes
    in room rental rates that may be charged by InnSuites in response to market changing demand and rental rate changes or otherwise;

 
 
 

 
●
seasonality
    of our hotel operations business;

 
 
 

 
●
collectability
    of all receivables

 
 
 

 
●
our
    ability to sell any of our Hotels at market value, or at all;

 
 
 

 
●
interest
    rate fluctuations;

 
 
 

 
●
changes
    in, or reinterpretations of, governmental regulations, including, but not limited to, environmental and other regulations, the Americans
    with Disability Act, Covid-19 restrictions, and federal income tax laws and regulations;

 
 
 

 
●
competition
    including supply and demand for hotel rooms and hotel properties;

 
 
 

 
●
availability
    of credit or other financing;

 
 
 

 
●
our
    ability to meet present and future debt service obligations;

 
 
 

 
●
our
    ability to refinance or extend the maturity of indebtedness at, prior to, or after the time it matures;

 
 
 

 
●
any
    changes in our financial condition or operating results due to acquisitions or dispositions of hotel properties;

 
 
 

 
●
insufficient
    resources to pursue our current strategy;

 
 
 

 
●
concentration
    of our investments in the InnSuites ® brand;

 
 
 

 
●
loss
    of membership contracts;

 

17
 

 



 
●
the
    financial condition of franchises, brand membership companies, travel related companies, and receivables from travel related companies;

 
 
 

 
●
ability
    to develop and maintain positive relations with “Best Western” and potential future franchises or brands;

 
 
 

 
●
real
    estate and hospitality market conditions;

 
 
 

 
●
hospitality
    industry factors;

 
 
 

 
●
our
    ability to carry out our strategy, including our strategy regarding diversification and investments;

 
 
 

 
●
the
    Trust’s ability to remain listed on the NYSE American;

 
 
 

 
●
effectiveness
    and security of the Trust’s software program;

 
 
 

 
●
the
    need to periodically repair and renovate our Hotels at a cost at or in excess of our standard 4% reserve;

 
 
 

 
●
tariffs
    and health travel restrictions may affect trade and travel;

 
 
 

 
●
our
    ability to cost effectively integrate any acquisitions with the Trust in a timely manner;

 
 
 

 
●
increases
    in the cost and availability of labor, energy, healthcare, insurance and other operating expenses as a result of inflation, or changed
    or increased regulation, or otherwise;

 
 
 

 
●
presence
    of drugs or outbreaks of communicable diseases attributed to our hotels or impacting the hotel industry in general;

 
 
 

 
●
natural
    disasters, including adverse climate changes in the areas where we have or serve hotels;

 
 
 

 
●
airline
    strikes;

 
 
 

 
●
transportation
    and fuel price increases;

 
 
 

 
●
adequacy
    of property and liability insurance coverage including liability coverage, and increases in cost for property, liability, and health
    care coverage for employees and potential government regulation with respect to health care coverage;

 
 
 

 
●
data
    breaches or cybersecurity attacks, including breaches impacting the integrity and security of employee and guest data; and 

 
 
 

 
●
loss
    of key personnel and uncertainties in the interpretation and application of tax laws, and other legislation.

 
We
do not undertake any obligation to update publicly or revise any forward-looking statements whether as a result of new information, future
events or otherwise except as may be required by law. Pursuant to Section 21E(b)(2)(E) of the Securities Exchange Act of 1934, as amended,
the qualifications set forth hereinabove are inapplicable to any forward-looking statements in this Form 10-K relating to the operations
of the Partnership.
 
Item
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not
required for smaller reporting companies.
 
Item
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
All
other schedules are omitted, as the information is not required or is otherwise furnished.
 

18
 

 

INNSUITES
HOSPITALITY TRUST
LIST
OF CONSOLIDATED FINANCIAL STATEMENTS
 
The
following consolidated financial statements of InnSuites Hospitality Trust are included in Item 8:
 


Reports of Independent Registered Public Accounting Firm PCAOB: 5041
20

 
 

Consolidated Balance Sheets – January 31, 2024 and 2023
21

 
 

Consolidated Statements of Operations – Years Ended January 31, 2024 and 2023
22

 
 

Consolidated Statements of Shareholders’ Equity – Years Ended January 31, 2024 and 2023
23

 
 

Consolidated Statements of Cash Flows – Years Ended January 31, 2024 and 2023
24

 
 

Notes to the Consolidated Financial Statements – Years Ended January 31, 2024 and 2023
25

 

19
 


 
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To
the Board of Directors and Shareholders of InnSuites Hospitality Trust:
 
Opinion
on the Financial Statements
 
We
have audited the accompanying consolidated balance sheets of InnSuites Hospitality Trust (the “Company”) as of January 31,
2024 and 2023, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our
opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2024
and 2023, and the results of its operations and its cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States.
 
Basis
for Opinion
 
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
 
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides
a reasonable basis for our opinion.
 
Critical
Audit Matter
 
Critical
audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be
communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and
(2) involved our especially challenging, subjective, or complex judgments.
 
We
determined that there are no critical audit matters.
 
/S/
BF Borgers CPA PC
BF
Borgers CPA PC (PCAOB ID 5041)
 
We
have served as the Company’s auditor since 2022
Lakewood,
CO
April
8, 2024
 

20
 

 

INNSUITES
HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
 



  
    
   

  
JANUARY 31, 2024  
JANUARY 31, 2023 

ASSETS 
   
  

Current Assets: 
    
   

Cash 
$1,325,368  
$2,111,383 

Accounts Receivable 
 111,946  
 101,737 

Employee Retention Credit Receivable 
 1,233,527  
 1,753,955 

Prepaid Expenses and Other Current Assets 
 310,891  
 200,429 

Total Current Assets 
 2,981,732  
 4,167,504 

Property and Equipment, net 
 7,051,192  
 7,209,488 

Notes Receivable (net) 
 1,925,000  
 1,925,000 

Notes Receivable (net) 
 -  
 - 

Operating Lease – Right of Use 
 2,088,693  
 2,108,418 

Finance Lease – Right of Use 
 -  
 20,812 

Convertible Note Receivable 
 1,000,000  
 1,000,000 

Investment in Private Company Stock 
 633,750  
 588,750 

TOTAL ASSETS 
$15,680,367  
$17,019,972 

  
    
   

LIABILITIES AND SHAREHOLDERS’ EQUITY 
    
   

  
    
   

LIABILITIES 
    
   

Current Liabilities: 
    
   

Accounts Payable and Accrued Expenses 
$1,049,530  
$990,291 

Current Portion of Mortgage Notes Payable, net of Discount 
 230,921  
 223,680 

Current Portion of Other Notes Payable 
 470,000  
 570,000 

Current Portion of Operating Lease Liability 
 6,268  
 12,010 

Current Portion of Finance Lease Liability 
 -  
 15,159 

Total Current Liabilities 
 1,756,719  
 1,811,140 

Mortgage Notes Payable, net of Discount 
 9,019,664  
 9,251,324 

Operating Lease Liability, net of current portion 
 2,249,072  
 2,267,645 

Finance Lease Liability, net of current portion 
 -  
 7,718 

TOTAL LIABILITIES 
 13,025,455  
 13,337,827 

  
    
   

COMMITMENTS AND CONTINGENCIES 
 -  
 - 

  
    
   

SHAREHOLDERS’ EQUITY 
    
   

Shares of Beneficial Interest, without par value, unlimited authorization; 8,988,804 and 9,161,589 shares issued and 8,791,822 and 9,010,909 shares outstanding at January 31, 2024 and January 31, 2023, respectively 
 7,039,055  
 6,992,148 

Treasury Stock, 196,982 and 150,680 shares held at cost at January 31, 2024 and January 31, 2023, respectively 
 (872,238) 
 (417,100)

TOTAL TRUST SHAREHOLDERS’ EQUITY 
 6,166,817  
 6,575,048 

NON-CONTROLLING INTEREST 
 (3,511,905) 
 (2,892,903)

TOTAL EQUITY 
 2,654,912  
 3,682,145 

TOTAL LIABILITIES AND EQUITY 
$15,680,367  
$17,019,972 

 


See
accompanying notes to these consolidated financial statements
 

21
 


 
INNSUITES
HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
 


  
    
   

  
FOR THE YEARS ENDED 

  
JANUARY 31, 

  
2024  
2023 

REVENUE 
   
  

Room 
$7,292,204  
$6,974,468 

Food and Beverage 
 78,501  
 53,089 

Other 
 113,693  
 118,130 

TOTAL REVENUE 
 7,484,398  
 7,145,687 

  
    
   

OPERATING EXPENSES 
    
   

Room 
 2,525,093  
 2,221,990 

Food and Beverage 
 187,864  
 198,808 

Telecommunications 
 622  
 314 

General and Administrative 
 2,470,361  
 2,226,788 

Sales and Marketing 
 408,886  
 451,495 

Repairs and Maintenance 
 466,212  
 412,696 

Hospitality 
 459,404  
 367,864 

Utilities 
 422,851  
 427,869 

Depreciation 
 679,157  
 702,386 

Real Estate and Personal Property Taxes, Insurance and Ground Rent 
 553,296  
 429,168 

Other 
 31,628  
 3,644 

TOTAL OPERATING EXPENSES 
 8,205,374  
 7,443,022 

OPERATING LOSS 
 (720,976) 
 (297,335)

Other Income 
 46,538  
 2,631 

Interest Income 
 50,057  
 65,441 

TOTAL OTHER INCOME 
 96,595  
 68,072 

Interest on Mortgage Notes Payable 
 480,522  
 466,728 

Interest on Other Notes Payable 
 21,185  
 63,619 

TOTAL INTEREST EXPENSE 
 501,707  
 530,347 

CONSOLIDATED NET LOSS BEFORE EMPLOYEE RETENTION CREDIT 
 (1,126,088) 
 (759,610)

Employee Retention Credit 
 1,403,164  
 1,403,164 

Income Tax Benefit 
 100  
 93,497 

CONSOLIDATED NET INCOME 
$277,176  
$737,051 

LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST 
$73,296  
$213,880 

NET INCOME ATTRIBUTABLE TO CONTROLLING INTERESTS 
$203,880  
$523,171 

NET INCOME PER SHARE – BASIC & DILUTED 
$0.02  
$0.06 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC & DILUTED 
 9,161,286  
 9,159,107 


 
See
accompanying notes to these consolidated financial statements
 

22
 


 
INNSUITES
HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR
THE YEARS ENDED JANUARY 31, 2024 and 2023
 




  
Shares  
Amount  
Shares  
Amount  
Equity  
Interest  
Equity 

  
Shares of Beneficial Interest  
Treasury Stock  
Trust Shareholders’  
Non-
Controlling  
Total 

  
Shares  
Amount  
Shares  
Amount  
Equity  
Interest  
Equity 

Balance, January 31, 2023 
 9,010,909  
$6,992,148  
 150,680  
$(417,100) 
$6,575,048  
$(2,892,903) 
$3,682,145 

Net Income 
 -  
 203,880  
 -  
 -  
 203,880  
 73,296  
 277,176 

Purchase of Treasury Stock 
 (265,087) 
 -  
 265,087  
 (455,138) 
 (455,138) 
 -  
 (455,138)

Shares of Beneficial Interest Issued for Services Rendered 
 46,000  
 23,147  
 -  
 -  
 23,147  
 -  
 23,147 

Dividends 
 -  
 (180,120) 
 -  
 -  
 (180,120) 
 -  
 (180,120)

Reconciliation of Treasury Shares 
 -  
 -  
 (218,785) 
 -  
 -  
 -  
 - 

Distribution to Non-Controlling Interests 
 -  
 -  
 -  
 -  
 -  
 (692,298) 
 (692,298)

Balance, January 31, 2024 
 8,791,822  
$7,039,055  
 196,982  
$(872,238) 
$6,166,817  
$(3,511,905) 
$2,654,912 


 


  
Shares of Beneficial Interest  
Treasury Stock  
Trust Shareholders’  
Non-
Controlling  
Total 

  
Shares  
Amount  
Shares  
Amount  
Equity  
Interest  
Equity 

Balance, January 31, 2022 
 9,079,513  
$6,599,069  
 44,076  
$(130,464) 
$6,468,605  
$(2,336,564) 
$4,132,041 

Balance 
 9,079,513  
$6,599,069  
 44,076  
$(130,464) 
$6,468,605  
$(2,336,564) 
$4,132,041 

Net Income 
 -  
 523,171  
 -  
 -  
 523,171  
 213,880  
 737,051 

Purchase of Treasury Stock 
 (106,604) 
 -  
 106,604  
 (286,636) 
 (286,636) 
 -  
 (286,636)

Shares of Beneficial Interest Issued for Services Rendered 
 38,000  
 52,693  
 -  
 -  
 52,693  
 -  
 52,693 

Sales of Ownership Interests in Subsidiary, net 
 -  
 -  
 -  
 -  
 -  
 40,000  
 40,000 

Dividends 
 -  
 (182,785) 
 -  
 -  
 (182,785) 
 -  
 (182,785)

Distribution to Non-Controlling Interests 
 -  
 -  
 -  
 -  
 -  
 (810,219) 
 (810,219)

Balance, January 31, 2023 
 9,010,909  
$6,992,148  
 150,680  
$(417,100) 
$6,575,048  
$(2,892,903) 
$3,682,145 

Balance 
 9,010,909  
$6,992,148  
 150,680  
$(417,100) 
$6,575,048  
$(2,892,903) 
$3,682,145 


 


See
accompanying notes to these consolidated financial statements
 

23
 


 
INNSUITES
HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
 


  
2024  
2023 

  
FOR THE YEARS ENDED 

  
JANUARY 31, 

  
2024  
2023 

CASH FLOWS FROM OPERATING ACTIVITIES 
    
   

Consolidated Net Income 
$277,176  
$737,051 

Adjustments to Reconcile Consolidated Net Income to Net Cash Provided By Operating Activities: 
    
   

Oher Notes Payable Correction 
 -  
 18,983 

Employee Retention Credit 
 520,428  
 (1,403,164)

Stock-Based Compensation 
 23,147  
 52,693 

Depreciation 
 679,157  
 702,386 

Changes in Assets and Liabilities: 
    
   

Accounts Receivable 
 (10,209) 
 26,533 

Prepaid Expenses and Other Assets 
 (110,462) 
 (82,561)

Operating Lease 
 (4,590) 
 (85,131)

Finance Lease 
 (2,065) 
 (1,493)

Accounts Payable and Accrued Expenses 
 59,239  
 88,922 

NET CASH PROVIDED BY OPERATING ACTIVITIES 
 1,431,821  
 54,219 

  
    
   

CASH FLOWS FROM INVESTING ACTIVITIES 
    
   

Improvements and Additions to Hotel Properties 
 (520,861) 
 (332,561)

Payments on Investments in Unigen 
 (45,000) 
 (315,000)

NET CASH USED IN INVESTING ACTIVITIES 
 (565,861) 
 (647,561)

  
    
   

CASH FLOWS FROM FINANCING ACTIVITIES 
    
   

Principal Payments on Mortgage Notes Payable 
 (224,419) 
 (166,535)

Borrowings on Mortgage Notes Payable 
 -  
 3,884,237 

Payments on Notes Payable - Related Party 
 -  
 (1,955,093)

Borrowings on Note Payable - Related Party 
 -  
 977,546 

Payments on Other Notes Payable 
 (100,000) 
 (20,170)

Payment of Dividends 
 (180,120) 
 (182,785)

Distributions to Non-Controlling Interest Holders 
 (692,298) 
 (810,219)

Sale of Ownership Interest in Subsidiary, net 
 -  
 40,000 

Repurchase of Treasury Stock 
 (455,138) 
 (286,636)

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES 
 (1,651,975) 
 1,480,345 

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 
 (786,015) 
 887,003 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 
 2,111,383  
 1,224,380 

CASH AND CASH EQUIVALENTS AT END OF PERIOD 
$1,325,368  
$2,111,383 


 
See
accompanying notes to these consolidated financial statements
 

24
 


 
INNSUITES
HOSPITALITY TRUST AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
AS
OF AND FOR THE YEARS ENDED JANUARY 31, 2024 AND 2023
 
1.
NATURE OF OPERATIONS AND BASIS OF PRESENTATION
 
As
of January 31, 2024, InnSuites Hospitality Trust (the “Trust”, “IHT”, “we”, “us” or “our”)
is a publicly traded unincorporated Ohio business real estate investment trust (REIT) with two hotels that IHT has an ownership interest
in and manages. The Trust and its shareholders directly in and through a Partnership, own interests in two hotels with an aggregate of
270 hotel suites in Arizona and New Mexico. Both are operated under the federally trademarked name “InnSuites”, as well as
operating under the brand name “Best Western”. The Trust and its shareholders hold a diversification $1 million 6% convertible
debenture in UniGen Power Inc., (“UniGen”), approximately $633,750 in UniGen’s privately-held common stock (540,000
shares), and hold warrants to make further UniGen Investments in the future, as further discussed in Note 2.
 
Hotel
Operations:
 
Full
service hotels often contain upscale full-service facilities with a large volume of full service accommodations, on-site full-service
restaurant(s), and a variety of on-site amenities such as swimming pools, a health club, children’s activities, ballrooms and on-site
conference facilities. Moderate or limited-service hotels are small to medium-sized hotel establishments that offer a limited amount
of on-site amenities. Most moderate or limited service establishments may still offer full service accommodations. The Trust considers
its Tucson, Arizona hotel and our hotel located in a subsidiary of Albuquerque, New Mexico to be moderate or limited service hotels.
IHT provides management services and marketing.
 
Our
Tucson, Arizona Hotel and our Hotel located in Albuquerque, New Mexico are moderate service hotels. Both hotels offer swimming pools,
fitness centers, business centers, and complimentary breakfast. In addition, the Hotels offer complementary social areas and modest conference
facilities. The Tucson hotel has “PJ’s” Pub and Café, as well.
 
The
Trust is the sole general partner of RRF Limited Partnership, a Delaware limited partnership (the “Partnership”), and owned
a 75.89% interest in the Partnership as of January 31, 2024 and January 31, 2023, respectively. The Trust’s weighted average ownership
for the twelve months ended January 31, 2024 and 2023 was 75.89%, respectively. As of January 31, 2024, the Partnership owned a 51.62%
interest in an InnSuites® hotel located in Tucson, Arizona. The Trust owns a direct 21.90% interest in an InnSuites® hotel located
in Albuquerque, New Mexico.
 
RRF
Limited Partnership, an IHT subsidiary, manages the Hotels’ daily operations under 2 management agreements. RRF also provides the
use of the “InnSuites” trademark to the Hotels. All expenses and reimbursements between the Trust and RRF Partnership have
been eliminated in consolidation.
 
The
Trust classified the Hotels as operating assets, but these assets are available for sale. At this time, the Trust is unable to predict
when, and if, either of these will be sold. Neither the Tucson Hotel nor the Albuquerque Hotel is currently listed for sale, but the
Trust is willing to consider offers for each Hotel. Each of the Hotels is being made available at a price that management believes is
reasonable in relation to its current fair market value, earnings, profits, and replacement cost.
 
PRINCIPLES
OF CONSOLIDATION AND BASIS OF PRESENTATION
 
These
consolidated financial statements have been prepared by management in accordance with accounting principles in conformity with accounting
principles generally accepted in the United States of America (“GAAP”), and include all assets, liabilities, revenues and
expenses of the Trust and its subsidiaries. All material intercompany transactions and balances have been eliminated. Certain items have
been reclassified to conform to the current fiscal year presentation. The Trust exercises unilateral control over the Partnership and
the entities listed below. Therefore, the unaudited condensed financial statements of the Partnership and the entities listed below are
consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.
 

25
 


SCHEDULE
OF ENTITY OWNERSHIP PERCENTAGE 


  
IHT OWNERSHIP % 

ENTITY 
DIRECT  
INDIRECT (i) 

Albuquerque Suite Hospitality, LLC 
 21.90% 
 - 

Tucson Hospitality Properties, LLLP 
 -  
 51.62%

RRF Limited Partnership 
 75.89% 
 - 

 


(i)Indirect ownership is through the Partnership


 


(i)
Tucson
    Indirect ownership is through the Partnership

 
The
Trust has evaluated subsequent events through the date of the filing of its Form 10-K with the Securities and Exchange Commission. Other
than those events disclosed indicating the recovery of economic and business activity, and continuing progress by UniGen in seeking the
next round of financing and developing its innovative clean energy product, the Trust is not aware of any other significant events that
occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Trust’s
financial statements.
 
As
the general partner of the Partnership, the Trust exercises unilateral control over the Partnership. Therefore, the financial statements
of the Partnership are consolidated with the Trust, and all significant intercompany transactions and balances have been eliminated.
 
Under
Accounting Standards Codification (“ASC”) Topic 810-10-25, Albuquerque Suite Hospitality, LLC has been determined to be a
variable interest entity with the Trust as the primary beneficiary (see Note 5 – “Variable Interest Entity”). Therefore,
the financial statements of Albuquerque Suite Hospitality, LLC, are consolidated with the Trust, and all significant intercompany transactions
and balances have been eliminated.
 
The
financial statements of the Partnership and Tucson Hospitality Properties, LLLP are consolidated with the Partnership and the Trust,
and all significant intercompany transactions and balances have been eliminated.
 
NON-CONTROLLING
INTEREST
 
Non-controlling
interest in the Trust represents the limited partners’ proportionate share of the capital and earnings of the Partnership and the
two hotels. Income or loss is allocated to the non-controlling interest based on a weighted average ownership percentage in the entities
throughout the period, and capital is allocated based on the ownership percentage at year-end. Any difference between the weighted average
and point-in-time allocations is presented as a reallocation of non-controlling interest as a component of shareholders’ equity.
As of January 31, 2024, non-controlling interest represented 48.38% interest in the InnSuites® hotel located in Tucson, Arizona,
78.10% interest in the InnSuites® hotel located in Albuquerque, New Mexico, and 24.11% in the Partnership.
 
PARTNERSHIP
AGREEMENT
 
The
Partnership Agreement of the Partnership provides for the issuance of two classes of Limited Partnership units, Class A and Class B.
Class A and Class B Partnership units are identical in all respects. On January 31, 2024 and 2023, 211,755 Class A Partnership units
were outstanding, representing 1.60% of the total Partnership units, respectively. Additionally, as of January 31, 2024 and 2023, 2,974,038
Class B Partnership units were outstanding to and owned by James Wirth, the Trust’s Chairman and Chief Executive Officer, and Mr.
Wirth’s affiliates, representing 22.51% ownership in the Partnership. If all the Class A and B Partnership units were converted
on January 31, 2024 and 2023, the limited partners in the Partnership would receive 3,185,793 and 3,174,041 Shares of Beneficial Interest
of the Trust. As of January 31, 2024, and 2023, the Trust owns 10,025,724 general partner units in the Partnership, representing 75.89%
of the total Partnership units.
 
On
January 31, 2024, the total IHT Shares of Beneficial Interest are 8,988,804. Total Class A and Class B RRF Limited Partnership units
are 3,185,793. The total diluted shares that are convertible one for one is 12,174,597.
 
LIQUIDITY
 
The
Trust’s principal source of cash to meet its cash requirements is revenues from hotel room reservations and from RRF Management
fees from the Tucson, Arizona and Albuquerque, New Mexico properties. The Trust’s liquidity, including our ability to make distributions
to its shareholders, and to service debt, will depend upon the ability of the Trust and the Partnership’s ability to generate sufficient
cash flow from hotel operations, as well as to generate funds from repayment of intercompany advances and sale of assets.
 

26
 

 
At
a future date, the Trust may receive cash from hotel and energy operations and/or full or partial sale of one or both hotels, and/or
full or partial sale of its UniGen diversification investment.
 
As
of January 31, 2024, the Trust had a related party Demand/Revolving Line of Credit/Promissory Note with an amount payable of approximately
$0. The Demand/Revolving Line of Credit/Promissory Note accrues interest at 7.0% per annum and requires interest only payments. The Demand/Revolving
Line of Credit/Promissory Note has a maximum borrowing capacity to $2,000,000, which automatically renews annually. This is a two-way
Line of Credit, with both the Trust and an Affiliate lender having access to draw on the credit amount of up to $2,000,000 for either
party.
 
As
of January 31, 2024, the Trust had an amount receivable of the Advances to Affiliate credit facility of approximately $0.
 
As
of January 31, 2024, the Trust had three Revolving lines of Credit totaling $250,000 with the Republic Bank of Arizona. The lines had
a zero balance as of January 31, 2024.
 
With
approximately $1,325,000 of cash as of January 31, 2024, the availability of the combined $2,000,000 Advance to Affiliate credit facilities,
and the $250,000 Revolving Line of Credit with Republic Bank, the Trust believes that it has and will have enough cash on hand to meet
all of the financial obligations as they become due for twelve months from the date of filing this 10-K. In addition, management is analyzing
other strategic options available to the Trust, including the sale or refinance of one or both Hotel properties, or other investments.
However, such transactions may not be available on terms that are favorable to the Trust, or at all.
 
There
can be no assurance that the Trust will be successful selling properties, merging, or raising additional or replacement funds, or that
these funds may be available on terms that are favorable to it. If the Trust is unable to raise additional or replacement funds, it may
be required to sell or refinance certain of our assets to meet liquidity needs, which may not be on terms that are favorable.
 
SEASONALITY
OF THE HOTEL BUSINESS
 
The
Hotels’ operations historically have been somewhat seasonal. The Tucson Arizona Hotel historically experiences the highest occupancy
in the first Fiscal Quarter (the winter high season) and, to a lesser extent, the fourth Fiscal Quarter. The second Fiscal Quarter (summer
low season) historically tends to be the lowest occupancy period at this Arizona Hotel. This seasonality pattern can be expected to cause
fluctuations in the Trust’s quarterly revenues. The Hotel located in Albuquerque, New Mexico historically experiences its most
profitable periods during the second and third Fiscal Quarters (the summer high season), providing some balance to the general seasonality
of the Trust’s hotel business.
 
The
seasonal nature of the Trust’s business increases its vulnerability to risks such as travel disruptions, labor force shortages
and cash flow issues. Further, if an adverse event such as an actual or threatened virus pandemic, terrorist attack, international conflict,
data breach, regional economic downturn or poor weather should occur at either of its two hotels, the adverse impact to the Trust’s
revenues and profit could be significant.
 
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
USE
OF ESTIMATES
 
The
preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the audited condensed
consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
 

27
 


 
The
Trust’s operations are affected by numerous factors, including the economy, inflation, virus/pandemic, competition in the hotel
industry and the effect of the economy on the travel and hospitality industries. The Trust cannot predict if any of the above items will
have a significant impact in the future, nor can it predict what impact, if any, the occurrence of these or other events might have on
the Trust’s operations and cash flows. Significant estimates and assumptions made by management include, but are not limited to,
the estimated useful lives of long-lived assets and recoverability of long-lived assets and the fair values of the long-lived assets.
 
PROPERTY
AND EQUIPMENT
 
Furniture,
fixtures, building and improvements and hotel properties are stated at cost, except for land, and depreciated using the straight-line
method over estimated lives ranging up to 40 years for buildings and improvements, and 3 to 10 years for furniture, fixtures, and equipment.
 
Land
is an indefinite-lived asset. The Trust tests its land for impairment annually, or whenever events or changes in circumstances indicate
an impairment may have occurred, by comparing its carrying value to its implied fair value.
 
For
tax purposes the Trust takes advantage of accelerated depreciation methods (MACRS) for new capital additions and improvements to its
Hotels.
 
Management
applies guidance ASC 360-10-35, to determine when it is required to test an asset for recoverability of its carrying value and whether,
or not, an impairment exists. Under ASC 360-10-35, the Trust is required to test a long-lived asset for impairment when there is an indicator
of impairment. Impairment indicators may include, but are not limited to, a drop in the performance of a long-lived asset, a decline
in the hospitality industry or a decline in the economy. If an indicator of potential impairment is present, then an assessment is performed
of whether the carrying amount of an asset exceeds its estimated undiscounted future cash flows over its estimated remaining life.
 
If
the estimated undiscounted future cash flows over the asset’s estimated remaining life are greater than the asset’s carrying
value, no impairment is recognized; however, if the carrying value of the asset exceeds the estimated undiscounted future cash flows,
then the Trust would recognize an impairment expense to the extent the asset’s carrying value exceeds its fair value, if any. The
estimated future cash flows are based upon, among other things, assumptions about expected future operating performance, and may differ
from actual cash flows. Long-lived assets evaluated for impairment are analyzed on a property-specific basis independent of the cash
flows of other groups of assets. Evaluation of future cash flows is based on historical experience and other factors, including certain
economic conditions, and committed future bookings. Management has determined no impairment for the Fiscal Years ended January 31, 2024,
and January 31, 2023, respectively.
 
CASH
 
The
Trust believes it places its cash only with high credit quality financial institutions, although these balances periodically exceed federally
insured limits.
 
COST
METHOD INVESTMENT IN PRIVATE COMPANY STOCK
 
Investment
in private company stock consists of equity securities recorded at fair value. Fair value is defined as the price that would be received
to sell an asset in an orderly transaction between market participants at the measurement date. We analyze our marketable securities
in accordance with Accounting Standard Codification 321 (“ASC 321”). Valuations for private company stock are based on quoted
prices for identical assets in active markets. Where marketable securities were found not be part of an actively traded market, we made
a measurement alternative election and estimate the fair value at cost of the investment minus impairment.
 
During
the Fiscal Year ended January 31, 2024, 45,000 warrants were exercised for $45,000 and in return the Trust received 45,000 shares of
UniGen. As of January 31, 2024, the Trust owned 540,000 shares of common stock in UniGen Power, Inc. (UniGen), a non-affiliated privately
held entity, at a cost of $633,750. As of January 31, 2024, the Trust accounted for such securities at cost minus impairment due to the
investment not being traded on an active market noting that UniGen had limited operations and was still in the start-up and research
and development stage. Management believes recording the investment at cost approximates fair value since there have been no significant
changes in the operations of UniGen and UniGen’s projects are still in the R&D phase.
 

28
 


 
REVENUE
RECOGNITION
 
Hotel
and Operations
 
Revenues
are primarily derived from the sources below and are recognized as services are rendered and when collectability is reasonably assured.
Amounts received in advance of revenue recognition are considered deferred liabilities and are generally not significant.
 
Revenues
primarily currently consist of room rentals, food and beverage sales, management and trademark fees and other miscellaneous revenues
from our properties. Revenues are recorded when rooms are occupied and when food and beverage sales are delivered. Management and trademark
fees include a monthly accounting fee and a percentage of hotel room revenues for managing the daily operations of the Hotels.
 
Each
room night consumed by a guest with a cancelable reservation represents a contract whereby the Trust has a performance obligation to
provide the room night at an agreed upon price. For cancellable reservations, the Trust recognizes revenue as each performance obligation
(i.e., each room night) is met. Such contract is renewed if the guest continues their stay. For room nights consumed by a guest with
a non-cancellable reservation, the entire reservation period represents the contract term whereby the Trust has a performance obligation
to provide the room night or nights at an agreed upon price. For non-cancellable reservations, the Trust recognizes revenue over the
term of the performance period (i.e., the reservation period) as room nights are consumed. For these reservations, the room rate is typically
fixed over the reservation period. The Trust uses an output method based on performance completed to date (i.e., room nights consumed)
to determine the amount of revenue it recognizes on a daily basis if the length of a non-cancellable reservation exceeds one night since
consumption of room nights indicates when services are transferred to the guest. In certain instances, variable consideration may exist
with respect to the transaction price, such as discounts, coupons and price concessions made upon guest checkout.
 
In
evaluating its performance obligation, the Trust bundles the obligation to provide the guest the room itself with other obligations (such
as free Wi-Fi, complimentary breakfast, and high speed internet), as the other obligations are not distinct and separable because the
guest cannot benefit from the additional amenities without the consumed room night. The Trust’s obligation to provide the additional
items or services is not separately identifiable from the fundamental contractual obligation (i.e., providing the room and its contents).
The Trust has no performance obligations once a guest’s stay is complete.
 
We
are required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable
governmental agencies on a periodic basis. We have a legal obligation to act as a collection agent. We do not retain these taxes and
fees and, therefore, they are not included in revenues. We record a liability when the amounts are collected and relieve the liability
when payments are made to the applicable taxing authority or other appropriate governmental agency.
 
ACCOUNTS
RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
 
Accounts
receivable are derived from guest stays and other reservations at the Hotels. Accounts receivable are carried at original amounts billed
less an estimate made for doubtful accounts based on a review of outstanding amounts on a quarterly basis. Management generally records
an allowance for doubtful accounts for 50% of balances over 90 days due and 100% of balances over 120 days due. Accounts receivable are
written off when collection efforts have been exhausted and they are deemed uncollectible. Recoveries, if any, of receivables previously
written off are recorded when received. The Trust does not charge interest on accounts receivable balances and these receivables are
unsecured. There is $0 in the allowance for doubtful accounts for the Fiscal Years ended January 31, 2024 and 2023.
 

29
 


 
LEASE
ACCOUNTING
 
The
Trust determines, at the inception of a contract, if the arrangement is a lease and whether it meets the classification criteria for
a finance or operating lease. Right of Use (ROU), assets represent the Trust’s right to use an underlying asset during the lease
term and lease liabilities represent the Trust’s obligation to make lease payments arising from the lease. ROU assets and lease
liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. ROU assets also
include any advance lease payments and exclude lease incentives. As most of the Trust’s operating leases do not provide an implicit
rate, the Trust uses its incremental borrowing rate based on information available at commencement date in determining the present value
of lease payments. Finance lease agreements generally include an interest rate that is used to determine the present value of future
lease payments. Operating fixed lease expense and finance lease depreciation expense are recognized on a straight-line basis over the
lease term (see Note 16).
 
TRUSTEE
STOCK-BASED COMPENSATION
 
The
Trust has an employee equity incentive plan, which is described more fully in Note 15 - “Share-Based Payments.” The three
independent members of the Board of Trustees each earn 6,000 IHT fully paid restricted Shares per year. All shares vest over one year
from date of grant. The Trust has paid the annual fees due to its Trustees by issuing Shares of Beneficial Interest out of its authorized
but unissued Shares. Upon issuance, the Trust recognizes the shares as outstanding. The Trust recognizes expense related to the issuance
based on the fair value of the shares upon the date of the restricted share grant and amortizes the expense equally over the period during
which the shares vest to the Trustees. From time to time, the Trustees and key employees receive one-time fully paid restricted share
grants, as well.
 
In
addition, 3,000 IHT Restricted Shares were issued to each of the Trust’s three accountants, and 2,000 restricted IHT Shares to
each of three IHT employees. The shares were fully vested at January 31, 2024.
 
The
following table summarizes restricted share activity during Fiscal Years 2023 and 2024.

 SUMMARIZES OF RESTRICTED SHARE ACTIVITY  



  
Restricted Shares 

  
Shares  
Price on Date of Grant 

Balance at January 31, 2022 
-  
- 

Granted 
 38,000  
$2.08 

Vested 
 (25,333) 
$2.08 

Forfeited 
 -  
   

Balance of unvested awards at January 31, 2023 
 12,667  
   

  
    
   

Granted 
 46,000  
$1.20 

Vested 
 (58,667) 
$1.20 

Balance of unvested awards at January 31, 2024 
 -  
   

 


TREASURY
STOCK
 
Treasury
stock is carried at cost, including any brokerage commissions paid to repurchase the shares. Any shares issued from treasury stock are
removed at cost, with the difference between cost and fair value at the time of issuance recorded against Shares of Beneficial Interest.
InnSuites Hospitality Trust continues its Company Stock Buyback Plan allowed within the NYSE American limitations.
 

30
 


 
INCOME
TAXES
 
The
Trust is subject to federal and state corporate income taxes, and accounts for deferred taxes utilizing an asset and liability method
whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when it is determined to be more likely than not that some portion, or
all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax
laws and rates on the date of enactment (see Note 18).
 
DIVIDENDS
AND DISTRIBUTIONS
 
In
Fiscal Years 2024 and 2023, the Trust paid a semi-annual dividend of $0.01 per share each, at the end of the first Fiscal quarter and
at the end of the second Fiscal quarter for a total annual dividend of $0.02 for each Fiscal Year in the amounts of $180,120 and $182,785,
respectively. The Trust’s long-term ability to pay dividends is largely dependent upon the operations of the Hotels, and/or sale
of assets. The Trust has paid uninterrupted dividends annually for 53 consecutive years since the Trust registered in 1971, and listed
with the NYSE.
 
NET
INCOME PER SHARE
 
Basic
and diluted net income per Share of Beneficial Interest is computed based on the weighted-average number of Shares of Beneficial Interest
and potentially dilutive securities outstanding during the period. Dilutive securities are limited to the Class A and Class B units of
the Partnership, which are convertible into 3,174,041 Shares of the Beneficial Interest, as discussed in Note 1.
 
For
the Fiscal Years ended January 31, 2024 and 2023, there were Class A and Class B Partnership units outstanding, which are convertible
into Shares of Beneficial Interest of the Trust. Assuming conversion at the beginning of each period, the aggregate weighted-average
of these Shares of Beneficial Interest would have been 3,185,793 in addition to the basic shares outstanding for the years ended January
31, 2024 and 2023. These Shares of Beneficial Interest issuable upon conversion of the Class A and Class B Partnership units were anti-dilutive
during the years ended January 31, 2024 and 2023 and are excluded in the calculation of diluted earnings per share for those periods.
 
SEGMENT
REPORTING
 
It has been determined that the Trust hotel ownership, Operations,
and Management Services are comprised of one reportable segment, Hotel Operations & Hotel Management Services (continuing operations)
segment that has ownership interest in two hotel properties with an aggregate of 270 suites in Arizona and New Mexico.
 
The
Trust has chosen to focus its hotel investments on the southwest region of the United States. The CODM does not review assets by geographical
region; therefore, no income statement or balance sheet information by geographical region is provided.
 
ADVERTISING
COSTS
 
Amounts
incurred for advertising costs are expensed as incurred. Advertising expense totaled approximately $316,000 and $338,000 for the twelve
months ended January 31, 2024 and 2023, respectively, and is reported in the consolidated Statement of Operations.
 

31
 

 

CONCENTRATION
OF CREDIT RISK
 
Credit
risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet its contractual obligations. Financial
instruments that potentially subject the Trust to a concentration of credit risk consist primarily of cash and cash equivalents. Management’s
assessment of the Trust’s credit risk for cash and cash equivalents is low as cash and cash equivalents are held in financial institutions
believed to be credit worthy. The Trust limits its exposure to credit loss by placing its cash with various major financial institutions
and invests only in short-term obligations.
 
While
the Trust is exposed to credit losses due to the non-performance of its counterparties, the Trust considers the risk of this remote.
The Trust estimates its maximum credit risk for accounts receivable at the amount recorded on the balance sheet.
 
FAIR
VALUE OF FINANCIAL INSTRUMENTS
 
For
disclosure purposes, fair value is determined by using available market information and appropriate valuation methodologies. Fair value
is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in an orderly
transaction between market participants in the principal or most advantageous market for the asset or liability. The fair value framework
specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable.
The fair value hierarchy levels are as follows:
 


 
●
Level
    1 – Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities
    that are identical to the assets or liabilities being measured.

 
 
 

 
●
Level
    2 – Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that
    are similar to the assets or liabilities being measured and / or quoted prices for assets or liabilities that are identical or similar
    to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant
    inputs and significant value drivers are observable in active markets are level 2 valuation techniques.

 
 
 

 
●
Level
    3 – Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable
    inputs are valuation technique inputs that reflect a company’s own judgments about the assumptions that market participants
    would use in pricing an asset or liability.

 
The
Trust has assets that are carried at fair value on a recurring basis, including stock and warrants in a 3rd party private
company on the unaudited condensed consolidated balance sheet.
 
Due
to their short maturities, the carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses
approximate fair value. The fair value of mortgage notes payable, notes payable to banks and notes and advances payable to related parties
is estimated by using the current rates which would be available for similar loans having the same remaining maturities and are based
on level 3 inputs.
 
3.
SALE OF OWNERSHIP INTERESTS IN ALBUQUERQUE SUBSIDIARY
 
On
July 22, 2010, the Board of Trustees unanimously approved, with Mr. Wirth abstaining, for the Partnership to enter into an agreement
with Rare Earth Financial, LLC (“Rare Earth”), an affiliate of Mr. Wirth, to sell units in Albuquerque Suite Hospitality,
LLC (the “Albuquerque entity”), which owns and operates the Albuquerque, New Mexico hotel property. Under the agreement,
Rare Earth agreed to either purchase or bring in other investors to purchase at least 49% of the membership interests in the Albuquerque
entity and the parties agreed to restructure the operating agreement of the Albuquerque entity. A total of 400 units were available for
sale for $10,000 per unit, with a two-unit minimum subscription. On September 24, 2010, the parties revised the Amended and Restated
Operating Agreement to name Rare Earth as the administrative member of the Albuquerque entity in charge of the day-to-day management.
 

32
 

 

On
December 9, 2013, the Trust entered into an updated restructuring agreement with Rare Earth to allow for the sale of additional interest
units in the Albuquerque entity for $10,000 per unit. Under the updated restructuring agreement, Rare Earth agreed to either purchase
or bring in other investors to purchase up to 150 (and potentially up to 190 if the overallotment is exercised) units. Under the terms
of the updated restructuring agreement, the Trust agreed to hold at least 50.1% of the outstanding units in the Albuquerque entity, on
a post-transaction basis, and intends to maintain this minimum ownership percentage through the purchase of units under this offering.
The Board of Trustees approved this restructuring on December 9, 2013. The units in the Albuquerque entity are allocated to three classes
with differing cumulative discretionary priority distribution rights through December 31, 2015. Class A units are owned by unrelated
third parties and have priority for distributions. Class B units are owned by the Trust and have second priority for distributions. Class
C units are owned by Rare Earth or other affiliates of Mr. Wirth and have the lowest priority for distributions from the Albuquerque
entity. Priority distributions of $700 per unit per year were cumulative until December 31, 2015; however, after December 31, 2015 Class
A unit holders continue to hold a preference on distributions over Class B and Class C unit holders. The Trust does not accrue for these
distributions as the preference periods have expired.
 
The
Trust has sold non-controlling interests in certain subsidiaries, including Albuquerque Suite Hospitality, LLC (the “Albuquerque
entity”) and Tucson Hospitality Properties, LLLP (the “Tucson entity, which sales are described in detail in our Annual Report
on Form 10-K filed on May 1, 2023 with the Securities and Exchange Commissions. Generally, interests have sold for $10,000 per unit with
a two-unit minimum subscription. The Trust maintains at least 50.1% of the units in one of the entities and intends to maintain this
minimum ownership percentage. Generally, the units in the each of the entities are allocated to three classes with differing cumulative
discretionary priority distribution rights through a certain time period. Class A units are owned by unrelated third parties and have
priority for distributions. Class B units are owned by the Trust and have second priority for distributions. Class C units are owned
by Rare Earth or other affiliates of Mr. Wirth and have the lowest priority for distributions. Priority distributions of $700 per unit
per year were cumulative until a certain date; however, after that date, generally Class A unit holders continue to hold a preference
on distributions over Class B and Class C unit holders. The Trust does not accrue for these distributions as the preference periods have
expired.
 
On
February 15, 2017, the Trust and Partnership entered into a restructuring agreement with Rare Earth Financial, LLC (“REF”)
to allow for the sale of non-controlling partnership units in Albuquerque Suite Hospitality LLC (“Albuquerque”) for $10,000
per unit, which operates the Best Western InnSuites Albuquerque Hotel and Suites Airport hotel property, a 112 unit hotel in Albuquerque,
New Mexico (the “Property”). REF and IHT restructured the Albuquerque Membership Interest by creating 250 additional Class
A membership interests from General Member majority-owned to accredited investor member-owned. In the event of sale of 250 Class A Interests,
total interests outstanding changed from 550 to 600 with Class A, Class B and Class C Limited Liability Company Interests (referred to
collectively as “Interests”) restructured with IHT selling approximately 200 Class B Interests to accredited investors as
Class A Interest. REF, as an Administrative Manager of Albuquerque, coordinating the offering and sale of Class A Interests to qualified
third parties. REF, IHT, and other REF Affiliates may purchase Interests from time to time. Rare Earth, as a General Partner of the Albuquerque
entity, will coordinate the offering and sale of Class A Interests to qualified third parties. Rare Earth and other Rare Earth affiliates
may purchase Interests under the offering. As part of this offering, Rare Earth was paid $200,000 for a restructuring fee which was recorded
in Equity. This restructuring is part of the Trust’s Equity Enhancement Plan to comply with Section 1003(a)(iii) of the NYSE American
Company Guide. For the Fiscal Year ending January 31, 2024 and 2023, the Trust purchased a net of 2 units, and sold 0 units, respectively.
 
As
of January 31, 2024, the Trust held a 21.90% ownership interest, or 132.5 Class B units, in the Tucson entity, Mr. Wirth and his affiliates
held a 0.17% interest, or approximately 1 Class C units, and other parties held a 77.93% interest, or approximately 471.5 Class A units.
For the Fiscal Year ended January 31, 2024, the Albuquerque entity made quarterly Priority Return payments.
 
4.
SALE OF OWNERSHIP INTERESTS IN TUCSON HOSPITALITY PROPERTIES SUBSIDIARY
 
On
February 17, 2011, the Partnership entered into a restructuring agreement with Rare Earth to allow for the sale of non-controlling interest
units in Tucson Hospitality Properties, LP (the “Tucson entity”), which operates the Tucson Oracle hotel property, then wholly
owned by the Partnership. Under the agreement, Rare Earth agreed to either purchase or bring in other investors to purchase up to 250
units, which represents approximately 41% of the outstanding limited partnership units in the Tucson entity, on a post-transaction basis,
and the parties agreed to restructure the limited partnership agreement of the Tucson entity. The Board of Trustees approved this restructuring
on January 31, 2011.
 

33
 


 
On
October 1, 2013, the Partnership entered into an updated restructured limited partnership agreement with Rare Earth to allow for the
sale of additional interest units in the Tucson entity for $10,000 per unit. Under the agreement, Rare Earth agreed to either purchase
or bring in other investors to purchase up to 160 (and potentially up to 200 if the overallotment is exercised) units. Under the terms
of the updated restructuring agreement, the Partnership agreed to hold at least 50.1% of the outstanding limited partnership units in
the Tucson entity, on a post-transaction basis, and intends to maintain this minimum ownership percentage through the purchase of units
under this offering. The Board of Trustees approved this restructuring on September 14, 2013. The limited partnership interests in the
Tucson entity are allocated to three classes with differing cumulative discretionary priority distribution rights through June 30, 2017.
Class A units are owned by unrelated third parties and have priority for distributions. Class B units are owned by the Partnership and
have second priority for distributions. Class C units are owned by Rare Earth or other affiliates of Mr. Wirth and have the lowest priority
for distributions from the Tucson entity. Priority distributions of $700 per unit per year are cumulative until June 30, 2016; however,
after June 30, 2016 Class A unit holders continue to hold a preference on distributions over Class B and Class C unit holders. The Trust
does not accrue for these distributions as the preference periods have expired.
 
If
certain triggering events related to the Tucson entity occur prior to the payment of all accumulated distributions to its members, such
accumulated distributions will be paid out of any proceeds of the event before general distribution of the proceeds to the members. In
the event that funds generated from a triggering event are insufficient to pay the total amount of all such accumulated distributions
owed to the members, all Class A members will participate pro rata in the funds available for distribution to them until paid in full,
then Class B, and then Class C. After all investors have received their initial capital plus a 7% per annum simple return, any additional
profits will be allocated 50% to Rare Earth, with the remaining 50% allocated proportionately to all unit classes. Rare Earth also received
a restructuring fee of $128,000, conditioned upon and arising from the sale of the first 100 units in the Tucson entity following the
October 1, 2013 restructuring. The Tucson entity plans to use its best efforts to pay the discretionary priority distributions. The Trust
does not guarantee and is not otherwise obligated to pay the cumulative discretionary priority distributions. RRF Limited Partnership
will continue to provide management, licensing and reservation services to the Tucson, Arizona property
 
As
of January 31, 2024, the Partnership held a 51.62% ownership interest, or 413.5 Class B units, in the Tucson entity, Mr. Wirth and his
affiliates held a 0.25% interest, or approximately 2 Class C units, and other parties held a 48.13% interest, or approximately 385.5
Class A units. For the Fiscal Year ended January 31, 2024, the Tucson entity made quarterly Priority Return payments.
 
5.
VARIABLE INTEREST ENTITIES
 
Management
evaluates the Trust’s explicit and implicit variable interests to determine if they have any interests in variable interest entities
(“VIEs”). Variable interests are contractual, ownership, or other pecuniary interests in an entity whose value changes with
changes in the fair value of the entity’s net assets, exclusive of variable interests. Explicit variable interests are those which
directly absorb the variability of a VIE and can include contractual interests such as loans or guarantees as well as equity investments.
An implicit variable interest acts the same as an explicit variable interest except it involves the absorbing of variability indirectly,
such as through related party arrangements or implicit guarantees. The analysis includes consideration of the design of the entity, its
organizational structure, including decision making ability over the activities that most significantly impact the VIE’s economic
performance. GAAP requires a reporting entity to consolidate a VIE when the reporting entity has a variable interest, or combination
of variable interest, that provides it with a controlling financial interest in the VIE. The entity that consolidates a VIE is referred
to as the primary beneficiary of that VIE.
 
The
Partnership has determined that the Albuquerque entity is a variable interest entity with the Partnership as the primary beneficiary
with the ability to exercise control, as determined under the guidance of ASC Topic 810-10-25. In its determination, management considered
the following qualitative and quantitative factors:
 
a)
The Partnership, Trust, and their related parties, which share common ownership and management, have guaranteed material financial obligations
of the Albuquerque hotel.
 
b)
The Partnership, Trust and their related parties have maintained, as a group, a controlling ownership interest in the Albuquerque hotel,
with the largest ownership belonging to the Trust.
 
c)
The Partnership, Trust and their related parties have maintained control over the decisions which most impact the financial performance
of the Albuquerque hotel, including providing the personnel to operate the property daily.
 

34
 

 

During
the Fiscal Years ended January 31, 2024, and January 31, 2023, neither the Trust nor the Partnership have provided any implicit or explicit
financial support for which they were not previously contracted, respectively. Both the Partnership and the Trust provided mortgage loan
guarantees which allow our properties to obtain new financing as needed, including the refinance of the Tucson Hotel on March 29, 2022.
 
The
following table includes assets that can only be used to settle the liabilities of Albuquerque Suites Hospitality LLC (Albuquerque Hotel)
and the creditors have no recourse to the Trust. These assets and liabilities, with the exception of the intercompany accounts, which
are eliminated upon consolidation with the Trust, are included in the accompanying consolidated balance sheets.
 SCHEDULE
OF VARIABLE INTEREST ENTITIES


  
2024  
2023 

  
January 31, 

  
2024  
2023 

Assets 
   
  

Cash 
$136,405  
$60,506 

Accounts Receivable 
 12,650  
 11,514 

Prepaid Expenses and Deposits 
 9,689  
 - 

Employee Retention Credit 
 -  
 - 

Hotel Properties, Net 
 995,235  
 1,017,392 

Operating Lease -Right of Use 
 2,088,693  
 2,108,418 

  
    
   

Total Assets 
$3,242,672  
$3,197,830 

  
    
   

Liabilities 
    
   

Accounts Payable and Accrued Expenses 
$899,921  
$496,109 

Operating Lease Liability (ASC 842) 
 2,255,341  
 2,279,655 

Mortgage Notes Payable 
 1,204,481  
 1,251,356 

Total Liabilities 
$4,359,743  
$4,027,120 

  
    
   

Equity 
 (1,117,071) 
 (829,290)

  
    
   

Liabilities & Equity 
$3,242,672  
$3,197,830 


 
6.
NOTES RECEIVABLE
 
Sale
of IBC Hospitality Technologies; IBC Hotels LLC (IBC)
 
On
August 15, 2018 InnSuites Hospitality Trust (IHT) entered into a final sale agreement of its technology subsidiary, IBC Hotels LLC (IBC),
to an unrelated third-party buyer (Buyer). As a part of the amended sale agreement, the Trust received a secured promissory note adjusted
to the principal amount of $1,925,000 with interest to be accrued at 3.75% per annum, which is recorded in the accompanying consolidated
balance sheet in continuing operations.
 


 
●
No
    interest accrued through May 2023, and no payments on the note receivable including principal and interest based on the previously
    extended time period are due through May 2023.

 
 
 

 
●
Note
    is secured by (1) pledge of the Buyer’s interest in IBC, and (2) a security interest in all assets of IBC, provided IHT shall
    agree to subordinate such equity interest to commercially reasonable debt financing upon request.

 
 
 

 
●
If
    IBC closes an equity transaction with net proceeds to IBC in excess of $2,500,000, IBC/Buyer shall pay or pre-pay to IHT an amount
    equal to (a) 50% of the net proceeds received by IBC and (b) 50% of the sum of the unpaid balance of the note and accrued interest
    accrued but unpaid interest thereon, as the date of receipt of the net proceeds by IBC.

 
 
 

 
●
The
    note has matured. However, IHT is currently in discussions for a further extension/modification due to the Covid disruption.

 
 
 

 
●
Future
    payments on this note are shown in the table below.

 

35
 


 SCHEDULE
OF FUTURE PAYMENTS OF DEBT


FISCAL YEAR 
  

2025 
 1,925,000 

Total 
$1,925,000 

 


 
●
Management’s
    evaluation of the current financial position of the Buyer, based on unaudited financial statements provided.

 
 
 

 
●
Management’s
    best, conservative valuation of IBC’s assets, and their marketability, in the case of a default by the Buyer.

 
 
 

 
●
The
    current and future impact of the COVID-19 pandemic, on the travel and hospitality industry, in which IBC’s reservation and
    booking technology operates. IHT strongly believes the IBC business model is sound and viable. 

 
As
of January 31, 2024, management evaluated the carrying value of the note determined no further impairment is needed at this time. This
is detailed further with ongoing discussions of an extension, which allows time for IBC to benefit from the current rebound in the travel,
hospitality services, and hotel industries currently being experienced.
 
IHT
has no managerial control nor does IHT have the ability to direct the operations or capital requirements of IBC as of August 1, 2018.
IHT has no rights to any benefits or losses from IBC as of August 1, 2018.
 
7.
CONVERTIBLE NOTE RECEIVABLE, COMMON STOCK AND WARRANTS IN UNIGEN POWER, INC.
 
On
December 16, 2019, the Trust entered into a Convertible Debenture Purchase Agreement with UniGen Power Inc. (“UniGen”).
 
The
Trust purchased secured convertible debentures (“Debentures”) in the aggregate amount of $1,000,000 (the “Loan Amount”)
at an annual interest rate of 6% (approximately $15,000 per quarter). The Debentures are convertible into 1,000,000 Class A shares of
UniGen Common Stock at an initial conversion rate of $1.00 per share.
 
UniGen
issued the Trust common stock purchase warrants (the “Debenture Warrants”) to purchase up to 1,000,000 shares of Class A
Common Stock. The Debenture Warrants are exercisable at an exercise price of $1.00 per share of Class A Common Stock.
 
UniGen
also issued the Trust additional common stock purchase warrants (“Additional Warrants”) to purchase up to 500,000 shares
of UniGen Class A Common Stock. The Additional Warrants are exercisable at an exercise price of $2.25 per share of Class A Common Stock.
 
IHT
may fund at IHT’s sole discretion a $500,000 line of credit at the option of IHT convertible into 500,000 shares of UniGen stock
at $1 per share.
 
The
total of all stock ownership upon conversion of the note receivable is 1 million shares and if all stock warrants available are exercised,
shares from conversion of the note receivable and shares from the exercise of warrants could total approximately 3 million UniGen shares,
which amounts to approximately 20% or more of fully diluted UniGen equity.
 
On
the Trust’s balance sheet, the investment of the $1,000,000 consists of approximately $700,000 in note receivables and approximately
$300,000 as the fair value of the warrant issued with the Trust’s investment in UniGen. The value of the premium related to the
fair value of the warrants will accrete over the life of the debentures.
 
The
value of the warrants issued with the note receivable was based on Black-Scholes pricing model based on the following inputs:
 SCHEDULE
OF WARRANTS VALUATION ASSUMPTIONS
Debenture
Warrants
 


Type of option 
Call option 

Stock price 
$2.25 

Exercise (Strike) price 
$1.00 

Time to maturity (years) 
 2.0 

Annualized risk-free rate 
 1.630%

Annualized volatility 
 27.43%

 

36
 

 

Additional
Warrants
 


Type of option 
Call option 

Stock price 
$2.25 

Exercise (Strike) price 
$2.25 

Time to maturity (years) 
 3.0 

Annualized risk-free rate 
 1.630%

Annualized volatility 
 27.43%

 
If
all notes are converted and all available but not outstanding warrants exercised, IHT could hold up to approximately 20% or more of UniGen
fully diluted equity ownership. Subsequent to January 31, 2023, no activity has occurred with this line of credit and thus no draws have
been taken.
 
During
the year ended January 31, 2023, the Trust reinvested $60,000 of interest income to exercise 60,000 warrants for 60,000 shares of common
stock in UniGen. Additionally, the Trust exercised 161,250 warrants for a total of $255,000 for 161,250 shares of common stock in UniGen.
 
During
the Fourth Fiscal Quarter (November 1, 2023 to January 31, 2024), three months ended January 31, 2024, the Trust reinvested $15,000 of
interest income to exercise 15,000 warrants for 15,000 shares of common stock in UniGen.
 
As
of January 31, 2024, IHT held 540,000 common shares of UniGen, purchased at a cost of $633,750. Management believes recording the investment
at cost approximates fair value since there have been no significant changes in the operations of UniGen and UniGen’s projects
are still in the R&D phase.
 
UniGen
Power Inc. (UPI), management reports progress of the UPI efficient clean energy innovation.
 
1.
UniGen has paused engineering to raise additional capital,
which is an ongoing process.
 
2.
Due to global travel and economic events, an increasingly unreliable American power grid, increasing demand for electric vehicles, inflation,
and supply chain pressures, the UniGen marketing team estimates product’s market has grown, and has increased the MSP planned power
plant price. The initial order for thirty units has been reaffirmed.
 
James
Wirth (President) and Marc Berg (Executive Vice President) both lack significant control. They have two of the seven Board of Directors
seats or 28% and were elected in December 2019 to serve on the board of UNIGEN to closely monitor and assist in the success of this potentially
power industry disruptive relatively clean energy generation innovation.
 
The
Trust has valued UniGen investment as a level 3 fair value measurement, for the following reasons: The investment does not qualify for
level 1 since there are no identical actively traded instruments or level 2 identical or similar unobservable markets.
 
8.
PROPERTY AND EQUIPMENT
 
As
of January 31, 2024 and January 31, 2023, hotel properties consisted of the following:
 
HOTEL
SEGMENT
 SCHEDULE
OF PROPERTY AND EQUIPMENT


  
January 31, 2024  
January 31, 2023 

Land 
$2,500,000  
$2,500,000 

Building and improvements 
 11,094,373  
 10,762,859 

Furniture, fixtures and equipment 
 4,450,747  
 4,261,400 

Total hotel properties 
 18,045,120  
 17,524,259 

Less accumulated depreciation 
 (11,028,366) 
 (10,358,060)

Hotel properties, net 
 7,016,754  
 7,166,199 

 

As
of January 31, 2024 and January 31, 2023, property and equipment consisted of the following:
 
CORPORATE
PP&E 
 


  
January 31, 2024  
January 31, 2023 

Land 
$7,005  
$7,005 

Building and improvements 
 75,662  
 75,662 

Furniture, fixtures and equipment 
 392,878  
 392,878 

Total property, plant and equipment 
 475,545  
 475,545 

Less accumulated depreciation 
 (441,107) 
 (432,256)

Property, Plant and Equipment, net 
$34,438  
$43,289 

 


37
 

 
9.
PREPAID EXPENSES AND OTHER CURRENT ASSETS
 
Prepaid
expenses and other current assets are carried at historical cost and are expected to be consumed within one year. As of January 31, 2024,
and 2023, prepaid expenses and other current assets consisted of the following:
 SCHEDULE
OF PREPAID EXPENSES AND OTHER CURRENT ASSETS


  
January 31, 2024  
January 31, 2023 

Tax and Insurance Escrow 
$162,290  
$96,774 

Deposits 
 -  
 7,000 

Prepaid Insurance 
 64,963  
 32,159 

Prepaid Workman’s Compensation 
 1,799  
 562 

Miscellaneous Prepaid Expenses 
 81,839  
 63,934 

Total Prepaid Expenses and Current Assets 
$310,891  
$200,429 

 
10.
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
As
of January 31, 2024 and 2023, accounts payable and accrued expenses consisted of the following:
 SCHEDULE
OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES


  
January 31, 2024  
January 31, 2023 

Accounts Payable 
$225,384  
$85,198 

Accrued Salaries and Wages 
 234,099  
 236,845 

Accrued Vacation 
 10,000  
 10,000 

Income Tax Payable 
    
 - 

Accrued Interest Payable 
    
 - 

Advanced Deposits 
 1,500  
 1,963 

Accrued Property Taxes 
 219,689  
 192,543 

Sales Tax Payable 
 140,318  
 234,366 

Accrued Other 
 218,540  
 229,376 

Total Accounts Payable and Accrued Expenses 
$1,049,530  
$990,291 

 
11.
MORTGAGE NOTES PAYABLE
 
On
January 31, 2023, the Trust had a mortgage note payable outstanding with respect to the Tucson Hotel. The mortgage note payable has a
scheduled maturity date in June 2042. Weighted average annual interest rates on mortgage notes payable as of January 31, 2023 was 4.69%.
 
On
June 29, 2017, Tucson Oracle entered into a $5.0 million Business Loan Agreement (“Tucson Loan”) as a first mortgage credit
facility with KS State Bank to refinance the existing first mortgage credit facility with an approximate payoff balance of $3.045 million
which will allow Tucson Hospitality Properties, LLLP to be reimbursed for prior and future hotel improvements. The Tucson Loan has a
maturity date of June 19, 2042. The Tucson Loan has an initial interest rate of 4.99% for the first five years and thereafter a variable
rate equal to the US Treasury + 2.0% with a floor of 4.99% and no prepayment penalty. This credit facility is guaranteed by InnSuites
Hospitality Trust, RRF Limited Partnership, Rare Earth Financial, LLC, James F. Wirth and Gail J. Wirth and the Wirth Family Trust dated
July 14, 2016.
 
On
March 29, 2022 Tucson Hospitality Properties LLLP, 51% owned by RRF Limited partnership, a subsidiary of InnSuites Hospitality Trust,
funded a new loan for $8.4 million to refinance it’s relatively low $ 4.5 million first position debt along with approximately
$ 3.8 million in inter-company advances from IHT used to complete the Best Western Product Improvement Plan (“PIP”) refurbishment
of the Hotel at an interest rate of 4.99% financed on a 25 year amortization with no prepayment penalty and no balloon. This credit facility
is guaranteed by InnSuites Hospitality Trust, RRF Limited Partnership, Rare Earth Financial, LLC, James F. Wirth and Gail J. Wirth, and
the Wirth Family Trust dated July 14, 2016. As of January 31, 2024, and January 31, 2023 the mortgage loan balance was approximately
$8,046,000, and $8,224,000, respectively, net of financing fees of approximately $97,000 and $93,000, respectively. The mortgage note
payable is due in monthly installments of approximately $50,000.
 
On
December 2, 2019, Albuquerque Suites Hospitality, LLC entered into a $1.4 million Business Loan Agreement (“Albuquerque Loan”)
as a first mortgage credit facility with Republic Bank of Arizona. The Albuquerque Loan has a maturity date of December 2, 2029. The
Albuquerque Loan has an initial interest rate of 4.90% for the first five years and thereafter a variable rate equal to the US Treasury
+ 3.5% with a floor of 4.90% and no prepayment penalty. This credit facility is guaranteed by InnSuites Hospitality Trust. As of January
31, 2024, and January 31, 2023 the mortgage loan balance was approximately $1,204,000, and $1,251,000, respectively, net of financing
fees of approximately $11,000 and $12,000, respectively. The mortgage note payable is due in monthly installments of approximately $9,000
per month.
 
The
following table summarizes the Trust’s mortgage notes payable, net of debt discounts, as of January 31, 2024:
 SCHEDULE
OF MORTGAGE NOTES PAYABLE


  
2024  
2023 

Mortgage note payable, due in monthly installments of $28,493, including interest at 4.69% per year, through June 19, 2042, secured by the Tucson Oracle property with a carrying value of $8.0 million at January 31, 2024. 
$8,046,104  
$8,223,648 

  
    
   

Mortgage note payable, due in monthly installments of $9,218, including interest at 4.90% per year,
    through December 2, 2029, secured by the Albuquerque property with a carrying value of $1.2 million at January 31, 2024. 
 1,204,481  
 1,251,356 

  
    
   

Totals: 
$9,250,585  
$9,475,004 

 

38
 


 
See
Note 15 – “Minimum Debt Payments” for scheduled minimum payments on the mortgage notes payable.
 
12.
NOTES PAYABLE TO BANKS
 
On
October 17, 2017, the Trust entered into a Business Loan Agreement with Republic Bank of Arizona for a revolving line of credit for $150,000.
The loan has a variable rate as the published rate in the Wall Street Journal and matures in December 2024. The balance as of January
31, 2024 and 2023 was $0.
 
On
October 17, 2017 Albuquerque Suite Hospitality LLC (the Albuquerque Hotel) entered into a Business Loan Agreement with Republic Bank
of Arizona for a revolving line of credit for $50,000. The loan has a variable rate as the published rate in the Wall Street Journal
and matures in October 2024. The balance as of January 31, 2024 and 2023 was $0.
 
On
October 17, 2017 Tucson Hospitality Properties LLLP (the Tucson Hotel) entered into a Business Loan Agreement for a revolving line of
credit for $50,000. The loan has a variable rate as the published rate in the Wall Street Journal and matures in October 2024. The balance
as of January 31, 2024 and 2023 was $0.
 
13.
RELATED PARTY NOTES
 
On
December 1, 2014, the Trust entered a Demand/Revolving Line of Credit/Promissory Note with Rare Earth Financial, LLC, an entity which
is wholly owned by Mr. Wirth and his family members. The Demand/Revolving Line of Credit/Promissory Note, as amended on June 19, 2017,
bears interest at 7.0% per annum for both a payable and receivable, interest is due quarterly, matures on August 24, 2024, and automatically
renews annually each calendar year. No prepayment penalty exists on the Demand/Revolving Line of Credit/Promissory Note. The balance
fluctuates through the period. On December 30, 2020, the Demand/Revolving Line of Credit/Promissory Note was extended and increased to
the current level of $2,000,000. As of January 31, 2024, and January 31, 2023, the Trust had an amount payable of approximately $0 and
$977,000, respectively. During the Fiscal Years ended January 31, 2024 and 2023, the Trust accrued approximately $0, respectively, of
interest expense.
 
14.
OTHER NOTES PAYABLE
 
As
of January 31, 2024, the Trust had a $200,000 unsecured note payable with an individual lender. The promissory note is payable on demand,
or on June 30, 2024, whichever occurs first. The loan accrues interest at 4.5% and interest only payments shall be made monthly. The
Trust may pay all of part of this note without any repayment penalties. The total principal amount of this loan is $200,000 as of January
31, 2024.
 

39
 

 
On
July 1, 2019, the Trust and the Partnership together entered into an unsecured loan totaling $270,000 with an individual investor at
4.5%, interest only, payable monthly. The loan has been subsequently extended to June 30, 2024. The Trust may pay all or part of this
note without any repayment penalties. The total principal amount of this loan is $270,000 as of January 31, 2024.
 
See
Note 15 – “Minimum Debt Payments” for scheduled minimum payments on the debt liabilities.
 
15.
MINIMUM DEBT PAYMENTS
 
Scheduled
minimum payments of debt, net of debt discounts, as of January 31, 2024 are approximately as follows in the respective Fiscal Years indicated:
 SCHEDULE
OF MINIMUM PAYMENTS OF DEBT


FISCAL YEAR 
MORTGAGES  
OTHER NOTES PAYABLE  
NOTES PAYABLE - RELATED PARTY  
TOTAL 

  
   
   
   
  

2025 
 234,169  
 470,000  
 -  
 704,169 

2026 
 247,906  
 -  
 -  
 247,906 

2027 
 260,999  
 -  
 -  
 260,999 

2028 
 263,125  
 -  
 -  
 263,125 

2029 
 274,685  
 -  
 -  
 274,685 

Thereafter 
 7,969,701  
 -  
           
 7,969,701 

  
$9,250,585  
$470,000  
$-  
$9,720,585 

 
16.
LEASES
 
The
Trust has operating leases for its corporate offices in Phoenix, Arizona and land leased in Albuquerque, New Mexico, and a cable equipment
finance lease in Tucson, Arizona. The Trust’s corporate office lease is month to month. All leases are non-cancelable.
 
Operating
Leases
 
The
Trust holds a month to month office lease agreement with Northpoint Properties for a commercial office lease at 1730 E Northern Ave,
Suite 122, Phoenix, Arizona 85020. Base monthly rent is $4,318. The Trust also pays electricity bills and applicable sales tax.
 
The
Trust’s Albuquerque Hotel is subject to non-cancelable ground lease. The Albuquerque Hotel non-cancelable ground lease was extended
on January 14, 2014 and expires in 2058.
 

40
 

 
The
Trust’s Operating Lease costs recognized in the consolidated statement of operations for the year ended January 31, 2024 consist
of the following:
 SCHEDULE OF LEASE COSTS 


  
For the Year Ended 

  
January 31, 2024 

Operating Lease Costs: 
   

Operating lease cost* 
 128,845 

 
Supplemental
cash flow information is as follows:
 SCHEDULE OF CASH FLOW INFORMATION


  
For the Year Ended 

  
January 31, 2024 

  
  

Cash paid for amounts included in the measurement of lease liabilities: 
   

Operating cash flows from operating leases 
$(4,590)

  
   

Lease obligations: 
   

Operating leases, net 
$2,255,340 

Long-term obligations 
$2,249,072 

 
Weighted
average remaining lease terms and discount rates were as follows:
 SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES


Weighted average remaining lease term (years) 
January 31, 2024 

Operating leases 
 33 

  
   

Weighted average discount rate 
 4.85%

Operating leases 
   

 

41
 

 
Finance
Leases
 
The
Company’s Tucson Oracle Hotel is subject to non-cancelable cable lease that expires in 2024.
 
The
Trust’s Finance Lease costs recognized in the Consolidated Statement of Income for the Fiscal Year ended January 31, 2024 consist
of the following:
 SCHEDULE OF LEASE COSTS


  
For the Year Ended 

  
January 31, 2024 

Finance Lease Costs: 
   

Amortization of right-of-use assets 
$13,874 

Interest on lease obligations 
 402 

 
Supplemental
cash flow information is as follows:
 SCHEDULE OF CASH FLOW INFORMATION


  
For the Year Ended 

  
January 31, 2024 

  
  

Cash paid for amounts included in the measurement of lease liabilities: 
   

Operating cash flows from finance leases 
$(2,065)

  
   

Lease obligations: 
   

Finance leases, net 
$- 

Long-term obligations 
$- 

 
Weighted
average remaining lease terms and discount rates were as follows:
 SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES


Weighted average remaining lease term (years) 
January 31, 2024 

Finance leases 
 - 

  
   

Weighted average discount rate 
 4.85%

Finance leases 
   

 
The
aggregate future lease payments for Finance Lease Liability as of January 31, 2024 are as follows:
 SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR FINANCE LEASE


For the Years Ending January 31, 
   

2025 
 - 

Total minimum lease payments 
$- 

Less: amount representing interest 
 - 

Total present value of minimum payments 
 - 

Less: current portion 
$- 

Long term portion of finance lease liability 
 - 

 
The
aggregate annual lease obligations at January 31, 2024 are as follows:
 SCHEDULE
OF ANNUAL LEASE OBLIGATIONS


Fiscal Year 
Operating Leases  
Finance Leases 

2025 
$134,355  
$- 

2026 
 134,367  
      - 

2027 
 134,379  
 - 

2028 
 134,391  
 - 

2029 
 134,403  
 - 

Thereafter 
 3,992,854  
 - 

Total minimum lease payments 
$4,664,749  
$- 

Less: amount representing interest 
 2,409,409  
 - 

Total present value of minimum payments 
 2,255,340  
 - 

 

42
 

 
17.
DESCRIPTION OF BENEFICIAL INTERESTS
 
Holders
of the Trust’s Shares of Beneficial Interest are entitled to receive dividends when and if declared by the Board of Trustees of
the Trust out of funds legally available. The holders of Shares of Beneficial Interest, upon any liquidation, dissolution or winding-down
of the Trust, are entitled to share ratably in any assets remaining after payment in full of all liabilities of the Trust. The Shares
of Beneficial Interest possess ordinary voting rights, each share entitling the holder thereof to one vote. Holders of Shares of Beneficial
Interest do not have cumulative voting rights in the election of Trustees and do not have pre-emptive rights.
 
On
January 2, 2001, the Board of Trustees approved a share repurchase program under Rule 10b-18 of the Securities Exchange Act of 1934,
as amended, for the purchase of up to 250,000 Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated
transactions. On September 10, 2002, August 18, 2005 and September 10, 2007, the Board of Trustees approved the purchase of up to 350,000
additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Additionally,
on January 5, 2009, September 15, 2009 and January 31, 2010, the Board of Trustees approved the purchase of up to 300,000, 250,000 and
350,000, respectively, of additional Partnership units and/or Shares of Beneficial Interest in open market or privately negotiated transactions.
Acquired Shares of Beneficial Interest will be held in treasury and will be available for future acquisitions and financings and/or for
awards granted under the Trust’s equity compensation plans/programs. Additionally, on June 19, 2017, the Board of Trustees approved
a share repurchase program under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, for the purchase of up to 750,000 Partnership
units and/or Shares of Beneficial Interest in open market or privately negotiated transactions. Acquired Shares of Beneficial Interest
will be held in treasury and will be available for future acquisitions and financings and/or for awards granted under the InnSuites Hospitality
Trust 1997 Stock Incentive and Option Plan.
 
For
the years ended January 31, 2024 and 2023, the Trust repurchased
265,087 and 106,604
Shares of Beneficial Interest at an average price of $1.72
and $2.69 per share, respectively. The
average price paid includes brokerage commissions. The Trust intends to continue repurchasing Shares of Beneficial Interest in
compliance with applicable legal and NYSE AMERICAN requirements. The Trust remains authorized to repurchase approximately an
additional 200,000
Partnership units and/or Shares of Beneficial Interest pursuant to the publicly announced share repurchase program, which has no
expiration date. Repurchased Shares of Beneficial Interest are accounted for as treasury stock in the Trust’s Consolidated
Statements of Shareholders’ Equity.
 

43
 

 
18.
FEDERAL INCOME TAXES
 
The
Trust and subsidiaries have income tax net operating loss carryforward of approximately $6.1M at January 31, 2024. In 2005, the
Trust had an ownership change within the meaning of the Internal Revenue Code Section 382. However, the Trust determined that such ownership
change would not have a material impact on the future use of the net operating losses.
 
The
Trust amended the Federal and State Tax Returns for tax years 2017 and 2018, resulting in a recalculation of the net operating loss carry-forward.
The impact of the amended returns are reflected in the below data.
 
Total
and net deferred income tax assets at January 31,
 SCHEDULE
OF DEFERRED TAX ASSETS AND LIABILITIES


  
2024  
2023 

Net operating loss carryforwards 
$2,113,926  
$1,432,100 

Bad debt allowance 
 -  
 - 

Accrued expenses 
 (2,622) 
 (1,000)

Syndications 
 2,923,000  
 2,923,000 

Prepaid insurance 
 64,963  
 32,159 

Alternative minimum tax credit 
 51,000  
 51,000 

Total deferred tax asset 
 5,150,267  
 4,437,259 

  
    
   

Deferred income tax liability associated with book/tax 
 (1,848,478) 
 (1,877,544)

Net deferred income tax asset 
 3,301,790  
 2,559,715 

Valuation Allowance 
 (3,301,790) 
 (2,559,715)

Net deferred income tax 
 -  
 - 

 
Income
taxes for the year ended January 31,

 SCHEDULE
OF INCOME TAX PROVISION



  
2024  
2023 

Current income tax provision (benefit) 
 (100) 
 (93,497)

Deferred income tax provision (benefit) 
 (213,744) 
 165,631 

Change in valuation
    allowance 
 213,744  
 (165,631)

Net income tax expense
    (benefit) 
 (100) 
 (93,497)

 
The
differences between the statutory and effective tax rates are as follows for the year ended January 31,

 SCHEDULE
OF EFFECTIVE INCOME TAX RATE RECONCILIATION



  
Amount  
Percent 

  
2024 

  
Amount  
Percent 

Federal statutory rates 
$(236,478) 
 21%

State income taxes 
 (58,727) 
 5%

Change in valuation allowance 
 (213,700) 
 19%

True-up in prior year returns 
 -  
 0%

Effective Rate 
 -  
 45%

 
The
differences between the statutory and effective tax rates are as follows for the year ended January 31,

 



  
Amount  
Percent 

  
2023 

  
Amount  
Percent 

Federal statutory rates 
$159,518  
 21%

State income taxes 
 (39,615) 
 5%

Change in valuation allowance 
 165,600  
 -22%

True-up in prior year returns 
 -  
 0%

Effective Rate 
 -  
 4%

 
The
Trust is taxed as a C-Corporation. The Trust’s practice is to recognize interest and/or penalties related to income tax
matters in income tax expense. The Trust has received various IRS and state tax jurisdiction notices which the Trust in the process
of responding to in which management believes the notices are without merit and expect full remediation of all tax notices. The
Trust and subsidiaries have total deferred tax assets of approximately $5.2
million which includes cumulative net operating loss carryforwards of $2.1
million and syndications of $2.9 million, and
deferred tax liability associated with book/tax differences of $1.8
million as of January 31, 2024. We have evaluated the net deferred tax asset and determined that it is not more likely than not we
will receive full benefit from the net operating loss carryforwards. Therefore, we have determined a valuation allowance of
approximately $3.3
million.
 

44
 

 
19.
OTHER RELATED PARTY TRANSACTIONS
 
As
of January 31, 2024 and January 31, 2023, Mr. Wirth and his affiliates held 2,974,038 Class B Partnership units, which represented 22.51%
of the total outstanding Partnership units, respectively. As of January 31, 2024 and January 31, 2023, Mr. Wirth and his affiliates held
6,250,296 and 6,228,296 Shares of Beneficial Interest in the Trust, respectively, which represented 71.09% and 69.12% respectively, of
the total issued and outstanding Shares of Beneficial Interest.
 
As
of January 31, 2024 and January 31, 2023, the Trust owned 75.89% of the Partnership. As of January 31, 2024, the Partnership owned a
51.62% interest in the InnSuites® hotel located in Tucson. The Trust also owned a direct 21.90% interest in one InnSuites® hotel
located in Albuquerque, New Mexico.
 
The
Trust directly manages the Hotels through the Trust’s majority-owned subsidiary, RRF Limited Partnership. Under the management
agreements, RRF manages the daily operations of both Trust Hotels. All Trust managed Hotel expenses, revenues and reimbursements among
the Trust, and the Partnership have been eliminated in consolidation. The management fees for the Hotels are 5% of room revenue and a
monthly accounting fee of $2,000 per hotel. These agreements have no expiration dates but may be cancelled by either party with 30-days
written notice, or potentially sooner in the event the property changes ownership.
 
During
the Fiscal Years ended January 31, 2024 and 2023, the Trust paid Berg Investment Advisors $6,000 and $6,000 for additional consultative
services rendered by Mr. Marc Berg, the Trust’s Executive Vice President.
 
The
Trust employs part time, an immediate family member of Mr. Wirth, Brian James Wirth, who provides part time IT Technology support services
to the Trust, receiving approximately $37,000, per year plus bonuses.
 
20.
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The
following table presents the estimated fair values of the Trust’s debt instruments, based on rates currently available to the Trust
for bank loans with similar terms and average maturities, and the associated carrying value recognized in the consolidated balance sheets
at January 31, 2024 and 2023:
 SCHEDULE OF FAIR VALUE LIABILITIES
MEASURED ON RECURRING BASIS 


  
2024  
2023 

  
Carrying Amount  
Fair Value  
Carrying Amount  
Fair Value 

Mortgage Notes Payable 
$9,250,585  
$2,833,263  
$9,584,449  
$3,408,024 

Other Notes Payable 
$470,000  
$470,000  
$570,000  
$570,000 

Notes Payable - Related Party 
$-  
$-  
$-  
$- 

 
21.
SUPPLEMENTAL CASH FLOW DISCLOSURES
 SCHEDULE
OF SUPPLEMENTAL CASH FLOWS DISCLOSURES


  
2024  
2023 

Cash Paid for Interest 
$479,000  
$465,000 

  
    
   

Notes Payable 
$21,000  
$46,000 

 
22.
COMMITMENTS AND CONTINGENCIES
 
Restricted
Cash:
 
The
Trust is obligated under a loan agreement relating to the Tucson Oracle property to deposit 4% of the individual hotel’s room revenue
into an escrow account to be used for capital expenditures. The escrow funds applicable to the Tucson Oracle property for which a mortgage
lender escrow exists is reported on the Trust’s Consolidated Balance Sheet as “Restricted Cash.” Since a $0 cash balance
existed in Restricted Cash for the Fiscal Years 2024 and 2023, Restricted Cash line was omitted on the Trust’s Consolidated Balance
Sheet.
 
Membership
Agreements:
 
The
Tucson and Albuquerque Hotels have entered into membership agreements with Best Western International, Inc. (“Best Western”)
for both hotel properties. In exchange for use of the Best Western name, trademark and reservation system, all Hotels pay fees to Best
Western based on reservations received through the use of the Best Western reservation system and the number of available suites at the
Hotels. The agreements with Best Western have no specific expiration terms and may be cancelled annually by either party. Best Western
requires that the hotels meet certain requirements for room quality. The two Best Western Hotels receive significant reservations through
the Best Western reservation system, and through Online Travel Agent (OTA) reservations systems, Expedia and Booking.com. Under these
arrangements, fees paid for membership fees and reservations were approximately $201,000 and $173,000 for the Fiscal Years ended January
31, 2024 and 2023, respectively. These costs include fees for the Albuquerque and Tucson hotels in 2023. These fees are included in room
operating expenses on the consolidated statements of operations for Albuquerque and Tucson.
 

45
 

 
Litigation:
 
The
Trust and/or its hotel affiliates, are involved from time to time in various other claims and legal actions arising in the ordinary course
of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Trust’s
unaudited condensed consolidated financial position, results of operations or liquidity.
 
The
nature of the operations of the Hotels exposes them to risks of claims and litigation in the normal course of their business. Although
the outcome of these matters cannot be determined and is covered by insurance, management does not expect that the ultimate resolution
of these matters will have a material adverse effect on the unaudited condensed consolidated financial position, results of operations
or liquidity of the Trust.
 
Indemnification:
 
The
Trust has entered into indemnification agreements with all our executive officers and Trustees. The agreements provide for indemnification
against all liabilities and expenses reasonably incurred by an officer or Trustee in connection with the defense or disposition of any
suit or other proceeding, in which he or she may be involved or with which he or she may be threatened, while in office or thereafter,
because of his or her position at the Trust. There is no indemnification for any matter as to which an officer or Trustee is adjudicated
to have acted in bad faith, with willful misconduct or reckless disregard of his or her duties, with gross negligence, or not in good
faith in the reasonable belief that his or her action was in the Trust’s best interests. These agreements require the Trust, among
other things, to indemnify the Trustee or officer against specified expenses and liabilities, such as attorneys’ fees, judgments,
fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s
status or service as our Trustee or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent
or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual
with respect to which the individual may be entitled to indemnification by us. The Trust may advance payments in connection with indemnification
under the agreements. The level of indemnification is to the full extent of the net equity based on appraised and/or market value of
the Trust. Historically, the Trust has not incurred any payments for these obligations and, therefore, no liabilities have been recorded
for these indemnities in the accompanying consolidated balance sheets.
 
23.
SHARE-BASED PAYMENTS
 
The
Trust compensates its three non-employee Trustees for their services through grants of restricted Shares. The aggregate grant date fair
value of these Shares was $10,800. These restricted 27,000 shares, (9,000 each to the three Independent Trustees), vest in equal monthly
amounts during Fiscal Year 2024.
 
On
May 15, 2023, the Trust’s Board of Trustees approved a grant to issue Officers, Trustees, and Key Employees totaling 46,000 fully
paid IHT restricted shares. The aggregate grant date fair value of these Shares was approximately $55,200. These shares partially vest
on December 31, 2023, and February 28, 2024, in two equal amounts.
 
In
addition, 1,000 IHT Restricted Shares were issued to each of the Trust’s two accountants, 2,000 restricted IHT Shares to each of
four IHT employees, and 3,000 shares to each of the three Trust Officers. The shares were fully vested at February 28, 2024.
 
See
Note 2 – “Summary of Significant Accounting Policies” for information related to grants of restricted shares under
“Stock-Based Compensation.”
 

46
 

 
24.
COVID-19 DISCLOSURE
 
COVID-19
had a material detrimental impact on our business, financial results and liquidity, in Fiscal Year 2021, ended January 31, 2021. Its
consequences had dramatically reduced travel and demand for hotel rooms, in Fiscal Year 2021. We believe that lodging demand and revenue
level have now significantly recovered.
 
Fiscal
Year 2024, starting February 1, 2023 and ending January 31, 2024, confirmed a significant strong rebound and encouraging progress. The
start of Fiscal Year 2025, starting February 1, 2024 and ending January 31, 2025, has shown no ill effects from the pandemic whatsoever.
 
COVID-19
and its consequences previously reduced travel and demand for hotel rooms, which previously had an impact our business, operations, and
financial results. We believe that lodging demand and revenue level is now at full recovery. The extent to which COVID-19 currently impacts
our business, operations, and financial results, including the duration and magnitude of such effects, is diminished. The negative impact
COVID-19 had on global and regional economies and economic activity, including the duration and magnitude of its impact on consumer discretionary
spending has been reduced significantly, and its short and longer-term impact on the demand for travel, transient and group business,
and levels of consumer confidence is no longer considered a major factor for Fiscal Year 2025, (February 1, 2024 to January 31, 2025).
 
25.
EMPLOYEE RETENTION TAX CREDIT
 
The
Trust is participating in Economic Relief through a Credit allowed for Entities that suffered financial hardship during the Covid-19
Pandemic, under the CARES (The Coronavirus Aid, Relief, and Economic Security) Act (2020), and The Consolidated Appropriations Act (2021).
Both provided fast and direct economic assistance for American workers, families, small businesses, and industries, by the U.S. Department
of the Treasury along with Congress. This Credit was available for all Entities impacted by the Virus and who paid Employment Taxes,
while trying to remain solvent and viable. It is a fully refundable tax credit for Eligible Employers that paid employees to carry on
a trade or business that was partially or fully suspended during any calendar year 2020; or that experienced significant decline in gross
receipts during any calendar quarter in 2020, due to COVID-19.
 
As
a result of both legislative acts, the Trust has and is expected to be receiving a net of approximately $2.8 million in a combination
of Employment Tax Refunds and Credits, for the two calendar years 2020, and 2021, respectively. As a result, the Trust placed an amount
equal to approximately 12% per Fiscal Quarter of this total as a Tax Credit Receivable and Tax Refund on the Balance Sheet and Income
statement, respectively, for the Fiscal Years ended January 31, 2024 and 2023, respectively. As of January 31, 2024, IHT has received
approximately $2.25 million, and is expected to receive approximately an additional $475,000.
 

47
 

 
26.
SUBSEQUENT EVENTS
 
The
Trust intends to maintain its current conservative dividend policy. The Trust currently is, and has, been paying two semi-annual dividends
each Fiscal Year totaling $0.02 per share per Fiscal Year. In the Fiscal Years ended January 31, 2024 and 2023, the Trust paid dividends
of $0.01 per share per share in each of the first and second quarters. The Trust has paid dividends each Fiscal Year since its inception
in 1971. The Trust paid the scheduled semi-annual $0.01 dividend payable on July 31, 2023, as well as February 5, 2024, and is once again
anticipated for July 31, 2024.
 
The
Trust’s Management received communication from the NYSE-American on August 29, 2022, indicating IHT is fully compliant with all
of the Continued Listing Standards Equity Requirements set forth in Part 10 of the NYSE American Company Guide, of the NYSE-American.
 
Subsequent
to the Fiscal Year ended January 31, 2024 the Trust repurchased 12,190 Shares of Beneficial Interest on the open market for a total cash
repurchase price of approximately $18,216.
 
Hotel
Operation results of the Albuquerque Hotel and the Tucson Hotel both achieved record results for the Fiscal Year ended January 31, 2024.
Increased record results are expected for the two hotels, during the Fiscal Year 2025, ending January 31, 2025. IHT reported a strong
annual improvement of results in Fiscal Year 2024, (February 1, 2023, to January 31, 2024), with Net Income Attributable to Controlling
Interests of $203,880. Earnings Per Share based on this Net Income Attributable to Controlling Interest amount was $0.02. Total Revenues
increased to approximately $7.5 million, which is an approximate increase of 5% from the same prior Fiscal Year total of $7.1 million.
Consolidated Net Income before non-cash depreciation expense was $956,333 for the Fiscal Year ended January 31, 2024. IHT hotel operations
are contributing to a solid start in the current 2025 Fiscal First Quarter, with both the Tucson Hotel and Albuquerque Hotel achieving
record results for the combined months of February and March, of the current Fiscal Year. Combined Revenue for both hotels surpassed
$1.5 million for the first two months of Fiscal 2025, a new combined record level. These are all positive signs for InnSuites, as progress continues heading in the
right direction as the Travel Industry, and InnSuites Hospitality Trust (IHT) specifically, continue to rebound and thrive.
 
Item
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
None.
 
Item
9A. CONTROLS AND PROCEDURES
 
Evaluation
of Disclosure Controls and Procedures
 
As
of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that
are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Based on this
evaluation, our Chief Executive Officer (CEO), and our Chief Financial Officer (CFO), concluded that our disclosure controls and procedures
were fully effective as of January 31, 2024.
 
Our
management, including our CEO and CFO, do not expect that our disclosure controls and procedures or our internal controls will prevent
all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
 

48
 

 
Management’s
Report on Internal Control Over Financial Reporting
 
Management
is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness
of internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision
of the Trust’s Chief Executive Officer and Chief Financial Officer and effected by the Trust’s Board of Trustees, management
and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. generally accepted accounting principles.
 
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
 
Assessment
of Internal Control over Financial Reporting
 
Our
management assessed the effectiveness of our internal control over financial reporting as of January 31, 2024. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in
Internal Control - Integrated Framework (2013). Based on management’s assessment, management concluded our internal control over
financial reporting was fully effective as of January 31, 2024.
 
Management’s
Remediation Initiatives
 
In
an effort to remediate past deficiencies and enhance the Trust’s internal control over financial reporting, the Trust previously
increased its technical accounting expertise through an increasingly seasoned Chief Financial Officer, and in Fiscal Years 2023/2024
promoting its Corporate Controller, and employing two full-time Senior Staff Accountants to assist with the Trust’s technical accounting
and internal control issues. The CFO has extensive public company reporting experience, to further assist with the Trust’s technical
accounting and internal controls.
 
We
have taken several appropriate and reasonable additional steps, as outlined above, to make the necessary improvements to our Accounting
staff and internal control over financial reporting, which resulted in management providing the support previously needed with the additional
hiring and training of sufficient personnel with appropriate training and expertise in accounting principles generally accepted in the
United States. This additional staffing and training has allowed us to make the necessary improvements, including:
 


 
●
Continuing
    to improve the control environment through (i) being staffed with sufficient number of personnel to address segregation of duties
    issues, ineffective controls and to perform control monitoring activities, (ii) increasing the level of GAAP knowledge by retaining
    additional technical accountants, (iii) implementing formal process to account for non-standard transactions, and (iv) implementing
    and formalizing management oversight of financial reporting at regular intervals; 

 
 
 

 
●
Continuing
    to update the documentation of our internal control processes, including implementing formal risk assessment processes and entity
    level controls; 

 
 
 

 
●
Implementing
    control activities that address relevant risks and assure that all transactions are subject to such control activities; Ensure systems
    that impact financial information and disclosures have effective information technology controls; 

 
 
 

 
●
Implementing
    plan to increase oversight and review of ad hoc spreadsheets while also working to reduce their use;

 
 
 

 
●
We
                                            are in the process of further enhancing the supervisory procedures to include additional
                                            levels of analysis and quality control reviews within the accounting and financial reporting
                                            functions; and
 

 
●
IHT
    previously strengthened the position of Chief Financial Officer (CFO), to assist with the Trust’s internal controls oversight.

 
 
 

 
●
IHT
    filled the position of Controller, to further assist with the Trust’s internal controls oversight, and process accounting.

 

49
 

 
We
believe that the remediation measures described above have and will continue to strengthen our internal control over financial reporting
and remediate any material weaknesses that may be identified. These remediation efforts were implemented throughout Fiscal Year 2023,
and early Fiscal Year 2024. Additional strengthening may take place in the balance of the current Fiscal Year 2025, as well.
 
Our
management believes that our financial statements included in this Annual Report on Form 10-K for the Fiscal Year ended January 31, 2024
fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented and that
this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements,
in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report.
 
Changes
in Internal Control over Financial Reporting
 
There
were continued positive changes in our internal control over financial reporting during our most recently completed Fiscal Quarter ended
January 31, 2024, that have materially positively affected, or are reasonably likely to positively materially affect, our internal control
over financial reporting. With the several new additions aforementioned above, these new additions should assist with the Trust’s
stability, technical accounting, and internal control issues.
 
Item
9B. OTHER INFORMATION
 
None.
 
PART
III
 
Item
10. TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
Trustees
and Executive Officers
 
The
following table sets forth information about our Trustees and executive officers. The information concerning our Trustees and executive
officers set forth below is based in part on information received from the respective Trustees and executive officers and in part on
our records. The information below sets forth the name, age, term of office, outside directorships and principal business experience
for each Trustee and executive officer of the Trust and includes the specific experience, qualifications, attributes, and skills that
led to the conclusion that each Trustee should serve on our Board of Trustees, in light of the Trust’s business and structure.
 

50
 

 


Name
 
Principal
Occupations During Past Five Years, Age as of April 8, 2024 and Directorships Held
 
Trustee
Since

 
 
 
 
 

Trustees
    Whose Terms Expire in 2024
 
 

 
 
 
 
 

Marc
    E. Berg
 
Vice
                                            Chairman, Executive Vice President, Secretary and Treasurer of the Trust since January 30,
                                            1998. Vice President – Acquisitions and Dispositions of the Trust since December 16,
                                            1998.
 
Prior
    to InnSuites, Mr. Berg was a wealth manager at Valley National Bank where his portfolio consisted of over half a billion dollars
    in equities, bonds and fixed income securities. Mr. Berg also worked at Young, Smith and Peacock, an investment banking firm, in
    public finance.
 
Mr.
    Berg has been qualified as a Registered Investment Advisor with the SEC and holds both an MBA (Finance) degree from the WP Carey
    Business School at Arizona State University as well as a Masters in International Management from the Thunderbird Graduate School
    of International Management. His undergraduate degree was a BSBA from American University in Washington, D.C.
 
Mr.
    Berg has in-depth familiarity with the operations of the Trust and extensive experience in property acquisitions and dispositions.
    In addition, Mr. Berg has served on our Board for over 25 years. Age: 72.
 
January
    30, 1998

 
 
 
 
 

Jessie
    Ronnie (“JR”) Chase (1)(2)(3)(6)
 
Owner
                                            of Park Avenue Investments, a real estate investment firm since 2000. From 1993 – 2003,
                                            Mr. Chase provided investor and management expertise to the Trust.
 
With
    over 35 years of real estate investment and hospitality experience, including experience managing a variety of real estate assets,
    Mr. Chase brings to our Board wide-ranging and in-depth experience in hotel management companies, technology and operations. Age:
    74.
 
December
    22, 2015

 
 
 

Trustees
    Whose Terms Expire in 2025
 
 

 
 
 
 
 

James
    F. Wirth
 
Chairman
                                            and Chief Executive Officer of the Trust since January 30, 1998, also serving as President
                                            of the Trust from 1998 to 2012, and since 2016. Manager and primary owner (together with
                                            his family affiliates) of Rare Earth Financial, L.L.C. and affiliated entities, owners and
                                            operators of hotels, since 1980. Age: 78.
 
Mr.
    Wirth has significant real estate and hotel industry experience, including Division President of Ramada Hotels, Inc., and extensive
    experience with the Trust. He holds a B.S. in Economics and Mathematics from the University of Arizona, Eller School of Business.
    He holds an MBA from Carnegie Mellon University, Tepper School of Business. Mr. Wirth has a significant investment in our Shares,
    which we believe provides him with a strong incentive to advance shareholder interests. In addition, Mr. Wirth has served on our
    Board for more than 25 years.
 
January
    30, 1998

 


Leslie
    (Les) T. Kutasi (1)(2)(3)(4)
 
Chairman
                                            of the Audit Committee, as well as Founder and President of Trend-Tex International, a multi-line
                                            textile sales and marketing company. In 1996, Mr. Kutasi founded Pacesetter Fabrics, LLC,
                                            a start-up textile importer and converter, and served as its Chief Executive Officer until
                                            2000. Prior to that, he served as President of California Textile Sales from 1990 to 1996.
                                            Mr. Kutasi has been a member of Young Presidents Organization Inc. (Arizona) since 2006.
                                            Age: 73.
 
Mr.
    Kutasi has more than 35 years of residential real estate and investment experience that is valuable to our Board.
 
January
    31, 2013

 
 
 
 
 


Trustees
    Whose Terms Expire in 2026
 
 

 
 
 
 
 

Steven
                                            S. Robson (1)(2)(3)(5)
 
 
Owner
                                            of Scott Homes, residential real estate developers. Age: 67.
 
Mr.
    Robson has strategic leadership and residential real estate development experience as well as experience in negotiating complex transactions
    and maintaining mission, vision and values. In addition, Mr. Robson has served on our Board for more than 25 years.
 
June
    16, 1998

 
1
Member of the Audit Committee.
2
Member of the Compensation Committee.
3
Member of the Governance and Nominating Committee.
4
Chair of the Audit Committee.
5
Chair of the Compensation Committee.
6
Chair of the Governance and Nominating Committee.
 

51
 

 
Other
Executive Officers
 


Sylvin
                                            Lange
 
Chief
                                            Financial Officer, and Principal Accounting Officer of the Trust since 2020. Mr. Lange served
                                            as an Independent Consultant until becoming CFO.
 
For
    the years prior to joining the Trust in 2020, Mr. Lange was an Independent Consultant providing Financial Analysis, Auditing, Tax
    Assistance and Advice, Regulatory Supervision, Financial Reporting Guidance, and Overall Accounting Direction; providing overall
    financial and operational consulting and support, to a variety of business enterprises. He has over 25 years of experience in finance,
    accounting, tax, auditing, and management.
 
Mr.
    Lange holds a bachelor’s degree in Business Administration with a Concentration in Accounting from California State University.
    He has served in steadily increasing roles of responsibility, including within the leadership and management teams at both US Airways,
    and JDA Software previously. Age: 51.

 
We
request that all of our Trustees attend our Annual Meetings of Shareholders. Board attendance was high, for each of the meetings held
by the Board of Trustees and the Committees during Fiscal Year 2024. In addition, the independent Trustees are required to meet at least
annually in executive session without the presence of non-independent Trustees and management.
 
Trustee
Nominations and Qualifications
 
The
Governance and Nominating Committee expects to identify nominees to serve as our Trustees primarily by accepting and considering the
suggestions and nominee recommendations made by members of the Board of Trustees and our management and shareholders. Nominees for Trustees
are evaluated based on their character, judgment, independence, financial or business acumen, diversity of experience, ability to represent
and act on behalf of all of our shareholders, and the needs of the Board of Trustees. In accordance with its charter, the Governance
and Nominating Committee discusses diversity of experience as one of many factors in identifying nominees for Trustee, but does not have
a policy of assessing diversity with respect to any particular qualities or attributes. All of the current Trustees are men, due to the
departure of one woman and the reduction of Board size to five, during fiscal 2019. The Governance and Nominating Committee has not identified
any specific attributes that the Committee would desire to diversify on the Board. In general, before evaluating any nominee, the Governance
and Nominating Committee first determines the need for additional Trustees to fill vacancies or expand the size of the Board of Trustees
and the likelihood that a nominee can satisfy the evaluation criteria. The Governance and Nominating Committee would expect to re-nominate
incumbent Trustees who have served well on the Board of Trustees and express an interest in continuing to serve. Our Board of Trustees
is satisfied that the backgrounds and qualifications of our Trustees, considered as a group, provide a mix of experience, knowledge and
abilities that allows our Board to fulfill its responsibilities.
 
The
Governance and Nominating Committee will consider shareholder recommendations for Trustee nominees. A shareholder who wishes to suggest
a Trustee nominee for consideration by the Governance and Nominating Committee should send a resume of the nominee’s business experience
and background to Mr. Ronnie Chase, Chairperson of the Governance and Nominating Committee, InnSuites Hospitality Trust, 1730 E. Northern
Avenue, Suite 122, Phoenix, Arizona 85020. The mailing envelope and letter must contain a clear notation indicating that the enclosed
letter is a “Shareholder-Board of Trustees Nominee.”
 
Leadership
Structure of the Board of Trustees
 
Mr.
Wirth, our Chief Executive Officer, currently serves as Chairman of the Board. Our Second Amended and Restated Declaration of Trust,
as amended, provides that the Trustees shall annually elect a Chairman who shall be the principal officer of the Trust. Mr. Wirth has
served as Chairman of our Board of Trustees and our Chief Executive Officer since January 30, 1998. Our Board of Trustees has determined
that the Trust has been well-served by this structure of combined Chairman and Chief Executive Officer positions and that this structure
facilitates strong and clear leadership, with a single person setting the tone of the organization and having the ultimate responsibility
for all of the Trust’s operating and strategic functions, thus providing unified leadership and direction for the Board of Trustees
and the Trust’s executive management. Our Chairman also has a significant investment in our Shares, which we believe provides him
with a strong incentive to advance shareholder interests.
 

52
 

 
The
Trust does not have a lead independent Trustee but receives strong leadership from all of its members. Our Board Committees consist of
three independent Trustee members, and our independent Trustees meet at least annually in executive session without the presence of non-independent
Trustees and management. In addition, our Trustees take active and substantial roles in the activities of our Board of Trustees at the
full Board meetings. Our Trustees are able to propose items for Board meeting agendas, and the Board’s meetings include time for
discussion of items not on the formal agenda. Our Board believes that this open structure, as compared to a system in which there is
a designated lead independent trustee, facilitates a greater sense of responsibility among our Trustees and facilitates active and effective
oversight by the independent Trustees of the Trust’s operations and strategic initiatives, including any risks.
 
The
Board’s Role in Risk Oversight
 
Our
management devotes significant attention to risk management, and our Board of Trustees is engaged in the oversight of this activity,
both at the full Board and at the Board Committee level. The Board’s role in risk oversight does not affect the Board’s leadership
structure. However, our Board’s leadership structure supports such risk oversight by combining the Chairman position with the Chief
Executive Officer position (the person with primary corporate responsibility for risk management).
 
Our
Board’s role in the Trust’s risk oversight process includes receiving reports from members of senior management on areas
of material risk to the Trust, including operational, financial, legal, and regulatory and strategic risks. The Board of Trustees requires
management to report to the full Board (or an appropriate Committee) on a variety of matters at regular meetings of the Board and on
an as-needed basis, including the performance and operations of the Trust and other matters relating to risk management. The Audit Committee
also receives regular reports from the Trust’s independent registered public accounting firm on internal control and financial
reporting matters. In addition, pursuant to its charter, the Audit Committee is tasked with reviewing with the Trust’s counsel
major litigation risks as well as compliance with applicable laws and regulations, discussing with management its procedures for monitoring
compliance with the Trust’s code of conduct, and discussing significant financial risk exposures and the steps management has taken
to monitor, control and report such exposures. These reviews are conducted in conjunction with the Board’s risk oversight function
and enable the Board to review and assess any material risks facing the Trust.
 
Our
Board also works to oversee risk through its consideration and authorization of significant matters, such as major strategic, operational,
and financial initiatives and its oversight of management’s implementation of those initiatives. The Board periodically reviews
with management its strategies, techniques, policies, and procedures designed to manage these risks. Under the overall supervision of
our Board, management has implemented a variety of processes, procedures, and controls to address these risks.
 
Communications
with the Board of Trustees
 
Shareholders
and other interested parties who wish to communicate with the Board of Trustees or any individual member thereof may do so by writing
to the Secretary, InnSuites Hospitality Trust, 1730 E. Northern Avenue, Suite 122, Phoenix, Arizona 85020. The mailing envelope and letter
must contain a clear notation indicating that the enclosed letter is an “Interested Party-Board of Trustees Communication.”
The Secretary will review all such correspondence and regularly forward to the Board of Trustees a log and summary of all such correspondence
and copies of all correspondence that, in the opinion of the Secretary, deals with the functions of the Board of Trustees or Committees
thereof or that he otherwise determines requires their attention. Trustees may at any time review a log of all correspondence received
by us that is addressed to members of the Board of Trustees and request copies of any such correspondence. Concerns relating to accounting,
internal controls or auditing matters are immediately brought to the attention of our accounting department and handled in accordance
with procedures established by the Audit Committee for such matters.
 

53
 

 
Date
of 2024 Annual Meeting of Shareholders and Shareholder Proposals
 
We
expect that the 2024 Annual Meeting will be held in July or August, 2024. Therefore, the deadline for submitting shareholder proposals
for inclusion in our proxy statement and form of proxy for the 2024 Annual Meeting will be on or before July 1, 2024, which we believe
is a reasonable deadline for submission before we begin the printing and mailing of our proxy materials for the 2024 Annual Meeting.
A shareholder who wishes to present a proposal at the 2024 Annual Meeting but does not wish to have that proposal included in our proxy
statement and form of proxy relating to that meeting, will need to notify us of the proposal before July 1, 2024. When the date for the
2024 Annual Meeting is set, we will announce updated shareholder proposal deadlines. If notice of the proposal is not received by us
by that date, then the proposal will be deemed untimely, and we will have the right to exercise discretionary voting authority and vote
proxies returned to us with respect to that proposal.
 
Shareholders
should submit their proposals to InnSuites Hospitality Trust, 1730 E. Northern Avenue, Suite 122, Phoenix, Arizona 85020, Attention:
Mr. Marc Berg, Secretary.
 
Audit
Committee Information and Audit Committee Financial Expert
 
The
Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent auditors,
including reviewing the scope and results of audit and non-audit services. The Audit Committee also reviews internal accounting controls
and assesses the independence of our auditors. In addition, the Audit Committee has established procedures for the receipt, retention
and treatment of any complaints received by us regarding accounting, internal controls or auditing matters and the confidential, anonymous
submission by our employees of any concerns regarding accounting or auditing matters. The Audit Committee has the authority to engage
independent counsel and other advisors as it deems necessary to carry out its duties. The Audit Committee met four (4) times during Fiscal
Year 2024.
 
All
members of the Audit Committee are “independent,” as such term is defined by the SEC’s rules and the NYSE American
listing standards. The Board of Trustees has determined that Mr. Kutasi, a member of our Audit Committee, qualifies as an “audit
committee financial expert” under applicable SEC rules. We have posted our Amended and Restated Audit Committee Charter on our
Internet website at www.innsuitestrust.com. Information on our website is not part of this Amendment.
 
Audit
Committee Report
 
The
Audit Committee of the Board of Trustees has reviewed and discussed the audited consolidated financial statements included in the Trust’s
Annual Report on Form 10-K for the Fiscal Years ended January 31, 2024 and 2023 with the management of the Trust. In addition, the Audit
Committee has discussed with BF Borgers CPA PC (“BF Borgers”), the independent registered public accounting firm of the Trust,
the matters required to be discussed under Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with
Audit Committees. The Audit Committee has also received and reviewed the written disclosures and the letter from BF Borgers required
by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications
with the Audit Committee concerning independence and has discussed with BF Borgers its independence from the Trust, including the compatibility
of any non-audit services with BF Borgers’s independence. The Audit Committee has also pre-approved the fees to be charged to the
Trust by its independent auditors for audit services.
 
Based
on the foregoing, the Audit Committee recommended that such audited consolidated financial statements be included in the Trust’s
Annual Report for the Fiscal Year ended January 31, 2024.
 
By
the Audit Committee of the Board of Trustees:
 
Les
T. Kutasi, Chairman
Steven
S. Robson
Ronnie
Chase
 

54
 

 
Code
of Ethics for Senior Financial Officers
 
We
have adopted a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Controller, and persons performing
similar functions. We have posted our Code of Ethics for Senior Financial Officers on our website at www.innsuitestrust.com. We intend
to satisfy all SEC and NYSE AMERICAN disclosure requirements regarding any amendment to, or waiver of, the Code of Ethics relating to
our Chief Executive Officer and Chief Financial Officer and persons performing similar functions, by posting such information on our
website unless the NYSE AMERICAN requires a Form 8-K. In addition, we have adopted a Code of Conduct and Ethics that applies to all of
our employees, officers and Trustees. It is also available on our website at www.innsuitestrust.com.
 
Section
16(a) Beneficial Ownership Reporting Compliance
 
Section
16(a) of the Exchange Act requires our Trustees, executive officers, and beneficial holders of more than 10% of our Shares to file with
the SEC initial reports of ownership and reports of subsequent changes in ownership. The SEC has established specific due dates for these
reports, and we are required to disclose any late filings or failures to file during the last Fiscal Year.
 
Based
solely on our review of the copies of such forms (and amendments thereto) furnished to us and written representations from reporting
persons that no additional reports were required, we believe that all our Trustees, executive officers, and holders of more than 10%
of the Shares complied with all Section 16(a) filing requirements during the Fiscal Year ended January 31, 2024, except as set forth
above.
 
Item
11. EXECUTIVE COMPENSATION
 
Executive
Compensation Overview
 
The
following overview relates to the compensation of our executive officers listed in the Summary Compensation Table set forth below during
Fiscal Year 2024. Our executive officers are James F. Wirth, Chairman of the Board, President and Chief Executive Officer, Marc E. Berg,
Vice Chairman, Executive Vice President, Secretary, and Treasurer, and Sylvin Lange, Chief Financial Officer, (referred to below as our
“executive officers”).
 
Overview
of the Compensation Committee
 
The
Compensation Committee of the Board of Trustees currently consists of three independent Trustees. The Committee sets the principles and
strategies that serve to guide the design of the compensation programs for our executive officers. The Committee annually evaluates the
performance of our executive officers. Taking into consideration the factors set forth below, the Committee then approves their compensation
levels, including any bonuses. The Committee does not use an independent compensation consultant to assist it with its responsibilities.
The Committee does consider input from the Chief Executive Officer when determining compensation for the other executive officers.
 
Compensation
Philosophy and Objectives
 
Under
the supervision of the Compensation Committee, we have developed and implemented compensation policies, plans and programs that seek
to enhance our ability to recruit and retain qualified management and other personnel. In developing and implementing compensation policies
and procedures, the Compensation Committee seeks to provide rewards for the long-term value of an individual’s contribution to
the Trust. The Compensation Committee seeks to develop policies and procedures that offer both recurring and non-recurring, and both
financial and non-financial, incentives.
 
Compensation
for our executive officers has two main monetary components, salary, and bonus, as well as a benefits component. A base salary is a fixed
compensation component subject to annual adjustment and review, if appropriate, that is designed to attract, retain, and motivate our
executive officers and to align their compensation with market practices. As discussed below, for Fiscal Year 2024, the bonus component
consisted of cash bonuses that were intended to incentivize performance, as described below.
 

55
 

 
Our
compensation program does not rely to any significant extent on broad-based benefits or prerequisites. The benefits offered to our executive
officers are those that are offered to all of our full-time employees. We do not offer our executive officers any prerequisites.
 
Our
management and the Compensation Committee work in a cooperative fashion. Management advises the Compensation Committee on compensation
developments, compensation packages and our overall compensation program. The Compensation Committee then reviews, modifies, if necessary,
and approves the compensation packages for our executive officers.
 
Elements
of Compensation
 
In
setting the compensation for each executive officer, the Compensation Committee considers (i) the responsibility and authority of each
position relative to other positions within the Trust, (ii) the individual performance of each executive officer, (iii) the experience
and skills of the executive officer, and (iv) the importance of the executive officer to the Trust.
 
Base
Salary
 
We
pay base salaries to our executive officers in order to provide a level of assured compensation reflecting an estimate of the value in
the employment market of the executive officer’s skills, the demands of his or her position and the relative size of the Trust.
In establishing base salaries for our executive officers, the Compensation Committee considers our overall performance and the performance
of each individual executive officer, as well as market forces and other general factors believed to be relevant, including time between
salary increases, promotion, expansion of responsibilities, advancement potential, and the execution of special or difficult projects.
Additionally, the Compensation Committee takes into account the relative salaries of the executive officers and determines what it believes
are appropriate compensation level distinctions between and among the executive officers, including between the Chief Executive Officer
and the Chief Financial Officer and among the other executive officers. Although the Compensation Committee considers our financial performance,
there is no specific relationship between achieving, or failing to achieve, budgeted estimates, the performance of our Shares or our
financial performance and the annual salaries determined by the Compensation Committee for any of our executive officers. No specific
weight is attributed to any of the factors considered by the Compensation Committee; the Compensation Committee considers all factors
and makes a subjective determination based upon the experience of its members and the recommendations of our management.
 
As
Mr. Wirth holds a significant ownership stake in the Trust, the Compensation Committee did not increase his salary or provide him with
additional incentives. Based upon a review of Mr. Wirth’s performance and upon the recommendation of the Compensation Committee,
for Fiscal Years 2024 and 2023, Mr. Wirth’s annual base salary remained set at $153,060. The Compensation Committee did not rely
on any particular set of financial or non-financial factors, measures or criteria when determining the compensation offered to Mr. Wirth.
The Compensation Committee did consider Mr. Wirth’s substantial Share ownership when setting his base salary.
 
Cash
and Equity Bonuses
 
Fiscal
2024 Bonuses
 
Fiscal
2024 – Full Year Cash and Equity Bonus Program
 
On
January 29, 2019, the Compensation Committee adopted an incentive bonus program for the Executives for the full Fiscal Year ended January
31, 2024 (the “2021 Fiscal Year Bonus Program”). Under the 2019 Fiscal Year Bonus Program, an Executive will be entitled
to receive a bonus, upon the achievement by the Executive of performance-based on objectives which was based on exceeding budgeted revenues
and net income in hotel operations.
 

56
 

 
Fiscal
2024 - Performance-Based Cash Bonuses
 
Our
executive officers are eligible to receive cash bonuses under the General Manager Bonus Plan equal to 15% of the aggregate cash bonuses
received by the general managers of all of our hotels, regardless of region. The general managers receive a bonus based on the achievement
of budgeted gross operating profit (total revenues less operating expenses) (“GOP”) at their hotel on a quarterly and annual
basis. Under the plan, if the hotel’s actual quarterly and annual GOP exceeds the budgeted GOP, each general manager is eligible
for a potential maximum annual bonus of $20,000, consisting of a potential maximum quarterly bonus of $2,000 per quarter, ($8,000 per
year), and a potential maximum year-end bonus of $11,000, a risk management bonus of $1,000 and a discretionary excellent property inspection
bonus up to $1,000.
 
In
Fiscal Year 2024 ending January 31, 2024, the Board approved a stock bonus of up to 3,000 shares for the CFO, Controller, and our Independent
Consultant. In addition, our Director of Hotel Operations and IT/Technology Manager each were approved for up to 2,000 shares.
 
Quarterly
General Manager GOP Bonus Potential:
 


Percentage of Budgeted Quarterly GOP Achieved 
Cash Bonus 

Less than 95% 
$0 

95% 
$500 

98% 
$1,000 

102% 
$1,500 

106% or more 
$2,000 

 
Year-End
General Manager GOP Bonus Potential:
 


Percentage of Budgeted Annual GOP Achieved 
Cash Bonus 

Less than 95% 
$0 

95% 
$1,000 

98% 
$2,000 

102% 
$5,000 

106% 
$9,000 

108% or more 
$11,000 

 
The
general manager aggregate cash bonuses for Fiscal Year 2024 were as follows:
 


Period 
GM  Aggregate Cash Bonus 

  
  

First Quarter – Fiscal Year 2024 
$2,500 

Second Quarter – Fiscal Year 2024 
$500 

Third Quarter – Fiscal Year 2024 
$2,000 

Fourth Quarter – Fiscal Year 2024 
$800 

Year End – Fiscal Year 2024 
$9,000 

 
Benefits
and Other Compensation
 
We
maintain broad-based benefits that are provided to all employees, including health and dental insurance, life insurance and a 401(k)
plan. We also have a mandatory matching contribution for our 401(k) plan. We do not have a pension plan. Our executive officers are eligible
to participate in all of our employee benefit plans, in each case on the same basis as our other employees. See Note 23 – “Share
Based Payments and Stock Options” for additional information about our Stock Options.
 

57
 

 
Fiscal
Year 2024 Summary Compensation Table
 
The
table below shows individual compensation information paid to our executive officers for our Fiscal Years ended January 31, 2024 and
2023:
 


Name
    and Principal
 
Fiscal
 
 
Salary
 
 
Discretionary
    Bonus
 
 
Non-Equity
    Incentive Plan Compensation
 
 
All
    Other Compensation
 
 
Total
 

Position
    (1)
 
Year
 
 
($)
 
 
($)(3)
 
 
($)(4)
 
 
($)(1)(2)
 
 
($)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

James
    F. Wirth,
 
 
2023
 
 
 
153,060
 
 
 
       
 
 
 
4,629
 
 
 
 
 
 
 
157,689
 

Chief
    Executive Officer
 
 
2024
 
 
 
153,060
 
 
 
 
 
 
 
5,388
 
 
 
 
 
 
 
158,388
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Sylvin
    R. Lange,
 
 
2023
 
 
 
97,375
 
 
 
 
 
 
 
5,475
 
 
 
1,125
 
 
 
103,975
 

Chief
    Financial Officer
 
 
2024
 
 
 
97,375
 
 
 
 
 
 
 
10,700
 
 
 
1,125
 
 
 
109,275
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Marc
    E. Berg,
 
 
2023
 
 
 
67,134
 
 
 
 
 
 
 
4,629
 
 
 
1,200
 
 
 
72,963
 

Executive
    Vice President
 
 
2024
 
 
 
67,770
 
 
 
 
 
 
 
5,388
 
 
 
1,200
 
 
 
74,358
 

 
(1)
Matching contributions made under our 401(k) plan to our executive officers with a maximum of $500 per calendar year are included in
all other compensation.
 
(2)
In addition to the employer 401(k) match provided to all eligible Trust employees, Mr. Berg through his Berg Investment Advisors company
was compensated $4,020 for additional consultative services rendered by Mr. Marc Berg, the Trust’s Executive Vice President. Mr.
Berg, and Mr. Lange receive a monthly travel expense reimbursement of $100. For the Fiscal Year ending January 31, 2024, Mr. Berg, and
Mr. Lange received $1,200, and $1,125 respectively in expense reimbursement. For the Fiscal Year ending January 31, 2023, Mr. Berg, and
Mr. Lange received $1,200, and $1,125, respectively.
 
(3)
From time to time, Mr. Berg receives a discretionary bonus approved by the Compensation Committee team, related to his efforts resulting
in the sales of Hotels. $0 was paid during the Fiscal Year ended January 31, 2024, and Fiscal Year ended January 31, 2023, respectively.
 
(4)
During Fiscal Year ending January 31, 2024 Mr. Wirth, Mr. Berg, and Mr. Lange received Non-Equity Incentive Plan Compensation consisting
of Fiscal 2024 – Performance Based Cash Bonuses of $5,388, $5,388, and $10,700, respectively. During Fiscal Year ending January
31, 2023 Mr. Wirth, Mr. Berg, and Mr. Lange received Non-Equity Incentive Plan Compensation consisting of Fiscal 2023 – Performance
Based Cash Bonuses of $4,629, $4,629, and $5,475, respectively.
 
During
Fiscal Year 2024 and 2023, we did grant other equity-based awards. None of our executive officers owned any stock options, or had any
outstanding unvested Shares, as of January 31, 2024 and 2023. Consistent with ASC 718-10-55-10, compensation cost associated with issuance
of these options has not been recognized as shareholder approval is not perfunctory. For stock option grants additional information about
our stock option plan, see Note 23 to our Consolidated Financial Statements - “Stock Options.”
 
Additionally,
refer Note 23 of our Consolidated Financial Statements - Share Based Payments, and the section on Fiscal Year 2024 Trustee Compensation,
contained in Item11, for information on shares issued to our independent trustees from shareholder equity.
 
Indemnification
Agreements
 
We
have entered into indemnification agreements with all of our executive officers and Trustees. The agreements provide for indemnification
against all liabilities and expenses reasonably incurred by an officer or Trustee in connection with the defense or disposition of any
suit or other proceeding, in which he or she may be involved or with which he or she may be threatened, while in office or thereafter,
because of his or her position at the Trust. There is no indemnification for any matter as to which an officer or Trustee is adjudicated
to have acted in bad faith, with willful misconduct or reckless disregard of his or her duties, with gross negligence, or not in good
faith in the reasonable belief that his or her action was in our best interests. We may advance payments in connection with indemnification
under the agreements. The level of indemnification is to the full extent of the net equity based on appraised and/or market value of
the Trust.
 

58
 

 
Potential
Payments Upon Change in Control
 
We
do not have employment agreements with our executive officers. However, our 2017 Equity Incentive Plan (the “2017 Plan”)
provides that the Compensation Committee of the Board of Trustees, in its sole discretion, may take such actions, if any, as it deems
necessary or desirable with respect to any award that is outstanding as of the date of the consummation of the change in control. Such
actions may include, without limitation: (a) the acceleration of the vesting, settlement and/or exercisability of an award; (b) the payment
of a cash amount in exchange for the cancellation of an award; (c) the cancellation of stock options and/or SARs without payment therefor
if the fair market value of a share on the date of the change in control does not exceed the exercise price per share of the applicable
award; and/or (d) the issuance of substitute awards that substantially preserve the value, rights and benefits of any affected awards.
 
For
purposes of the 2017 Plan, subject to exceptions set forth in the 2017 Plan, a “change in control” generally includes (a)
the acquisition of more than 50% of the Trust’s Shares; (b) the incumbent board of trustees ceasing to constitute a majority of
the board of trustees; (c) a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets
of the Trust; and (d) approval by the shareholders of the Trust of a complete liquidation or dissolution of the Trust. The full definition
of “change in control” is set forth in the 2017 Plan.
 
When
an award is granted under the 2017 Plan, the Compensation Committee establishes the terms and conditions of that award, which are contained
in an award agreement. The form of stock option award agreement under the 2017 Plan provides for unvested stock options to immediately
vest in full and become exercisable if a change in control occurs while the participant is employed by the Trust or a subsidiary. In
addition, the form of restricted share agreement for non-employee Trustee awards provides that unvested restricted shares held by a Trustee
will immediately vest in full if, prior to a vesting date, a change in control of the Trust occurs while the participant is serving as
a Trustee.
 
A
participant’s award agreement under the 2017 Plan may also contain specific provisions governing the vesting or forfeiture of an
award upon a termination of the participant’s service to the Trust or a subsidiary. The form of stock option award agreement generally
provides that unvested stock options will become immediately vested in full if, prior to a vesting date, the participant ceases to be
employed by the Trust and its subsidiaries by reason of death or disability. Unvested stock options will be forfeited automatically if
the participant ceases to be employed by the Trust and its subsidiaries prior to an applicable vesting date. In addition, the form of
stock option award agreement provides for the termination of stock options, to the extent not previously exercised or forfeited, on the
earliest of the following dates: (i) one year after the termination of the participant’s employment by the Trust and its subsidiaries
due to death or disability; (ii) three months after the termination of the participant’s employment with the Trust and its subsidiaries
for any reason other than for death, disability or cause; (iii) immediately upon termination of employment, if the participant’s
employment is terminated by the Company and its subsidiaries for cause; or (iv) midnight on the tenth anniversary of the date of grant.
Unless otherwise provided in the applicable award agreement or in an another written agreement with the participant, “cause”,
as a reason for termination of a participant’s employment generally includes (a) the participant’s willful refusal to follow
lawful directives of the Trust which are consistent with the scope and nature of the participant’s duties and responsibilities;
(b) conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud or embezzlement; (c)
gross negligence or willful misconduct resulting in a material loss to the Trust or any of its subsidiaries or material damage to the
reputation of the Trust or any of its subsidiaries; (d) material breach of any one or more of the covenants contained in any proprietary
interest protection, confidentiality, non-competition or non-solicitation agreement between the participant and the Trust or a subsidiary;
or (e) violation of any statutory or common law duty of loyalty to the Trust or any of its subsidiaries.
 
The
form of restricted share agreement for non-employee Trustees generally provides that unvested restricted shares will become immediately
vested in full if, prior to a vesting date, the participant dies or a change in control occurs while the participant is serving as a
Trustee. Any unvested restricted shares will be forfeited automatically if the participant ceases to serve as a Trustee prior to an applicable
vesting date.
 

59
 

 
Fiscal
Year 2024 Trustee Compensation
 
We
compensate our non-employee Trustees for their services through grants of restricted Shares. The aggregate grant date fair value of these
Shares is shown in the table above. These restricted Shares vested in equal monthly amounts during our Fiscal Year 2024. As of January
31, 2024, Messrs. Kutasi, Chase and Robson did not hold any unvested Shares. As compensation for our Fiscal Year 2024, on February 15,
2023, we issued 9,000 additional restricted Shares (with the aggregate grant date fair value of $10,800 (per grant) to each of Messrs.
Kutasi, Chase, and Robson.
 
We
do not pay our Trustees an annual cash retainer, per meeting fees or additional compensation for serving on a Committee or as a Committee
Chair.
 
The
table below shows individual compensation information for our non-employee Trustees for our Fiscal Year ended January 31, 2024. Compensation
information for Messrs. Wirth and Berg and, who do not receive additional compensation for their service as Trustees, is included in
the Summary Compensation Table above:
 


Name 
Total Number of IHT Shares Awarded (#)  
Fees Earned or Paid in Cash  ($)  
Stock Awards ($)(1)  
Total ($) 

  
   
   
   
  

Leslie T. Kutasi 
 9,000  
$   0  
$10,800  
$10,800 

Steven S. Robson 
 9,000  
$0  
$10,800  
$10,800 

JR Chase 
 9,000  
$0  
$10,800  
$10,800 

 


 
(1)
The
    dollar amounts shown in the Stock Awards column reflect the aggregate grant date fair value of restricted Shares computed in accordance
    with the Financial Accounting Standards Board Accounting Standards Codification Topic 718. For a discussion of assumptions, we made
    in valuing restricted Shares, see Note 2, “Summary of Significant Accounting Policies – Stock-Based Compensation,”
    in the notes to our consolidated financial statements contained in our Annual Reports on Form 10-K for the Fiscal Years ended January
    31, 2024 and 2023. The Stock Awards were based on a stock price of $1.20 which was the closing price of the Trust’s Shares
    of Beneficial Interest as of May 15, 2023. The Board of Trustees met on May 15, 2023, and approved the payment.

 
Item
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
 
Ownership
of Shares
 
The
following table shows the persons who were known to us to be beneficial owners of more than five percent of our outstanding Shares of
Beneficial Interest, together with the number of Shares of Beneficial Interest owned beneficially by each Trustee and executive officer,
and the Trustees and executive officers as a group. The percentages in the table are based on 9,023,806 Shares of Beneficial Interest
issued and outstanding as of April 8, 2024. Unless otherwise specified, each person has sole voting and investment power of the Shares
of Beneficial Interest that he or she beneficially owns.
 

60
 

 
Greater-than-Five-Percent
Beneficial Owners and
Beneficial
Ownership of Trustees, and Executive Officers
 


  
Shares  
Percentage of 

Trustees and Executive Officers 
Beneficially Owned (1)  
Outstanding Shares 

James F. Wirth (2) 
 6,250,296  
 69.26%

Marc E. Berg 
 53,475  
 * 

Sylvin R. Lange 
 15,750  
 * 

JR Chase 
 73,459  
 * 

Leslie T. Kutasi 
 77,000  
 * 

Steven S. Robson 
 174,200  
 1.93%

Trustees and Executive Officers as a group (six persons) 
 6,644,180  
 73.62%

 


 
*
Less
    than one percent (1.0%).

 
(1)
Pursuant
    to the SEC’s rules, “beneficial ownership” includes Shares that may be acquired within 60 days following May 1,
    2020. However, none of the individuals listed in the table had the right to acquire any Shares within the 60-day period.

 
(2)
All
    Shares are owned jointly by Mr. Wirth and his spouse and/or by Rare Earth Financial, LLC, except for 1,530,341 Shares that are voted
    separately by Mr. Wirth, and 1,239,078 Shares that are voted separately by Mrs. Wirth. Mr. Wirth has pledged 1,466,153, and Mrs.
    Wirth has pledged 300,000 of these Shares as security. Mr. Wirth, his spouse and children own directly and indirectly all 2,974,038
    issued and outstanding Class B limited partnership units in the Partnership, the conversion of which is restricted. Mr. Wirth’s
    business address is 1730 E. Northern Avenue, Suite 122, Phoenix, Arizona 85020.

 
The
following table provides information about our equity compensation plans (other than qualified employee benefits plans and plans available
to shareholders on a pro rata basis) as of January 31, 2024:
 
Equity
Compensation Plan Information
 


Plan Category 
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights  
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights  
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column 

  
   
   
  

Equity compensation plans approved by security holders 
 0  
$
N/A  
 1,600,000 

  
    
 
   
   

Equity compensation plans not approved by security holders 
 None  
 
None  
 None 

 
Item
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND TRUSTEE INDEPENDENCE
 
Independence
of Trustees
 
The
Board of Trustees has determined that a majority of the Trustees, Messrs. Kutasi, Chase and Robson are “independent,” as
defined by the NYSE AMERICAN’s listing standards, for purposes of serving on the Board of Trustees and each committee of which
they are members. Messrs. Berg and Wirth are executive officers of the Trust and, therefore, are not “independent.” All members
of the Audit Committee, the Compensation Committee and the Governance and Nominating Committee are “independent,” as such
term is defined by the SEC rules and NYSE AMERICAN’s listing standards. Our independent Trustees meet at least annually in executive
session without the presence of non-independent Trustees and management. Except as described under “Certain Transactions”
below, there were no transactions, relationships, or arrangements in Fiscal Year 2024 that required review by the Board for purposes
of determining Trustee independence.
 

61
 

 
Certain
Transactions
 
Management
and Licensing Agreements
 
The
Trust directly manages the Hotels through the Trust’s wholly-owned subsidiary, RRF Limited Partnership (RRF). Under the management
agreements, RRF manages the daily operations of the Hotels. All Trust managed Hotel expenses, revenues and reimbursements among the Trust,
RRF, and the Partnership have been eliminated in consolidation. The management fees for the Hotels are 5% of room revenue and a monthly
accounting fee of $2,000 per hotel. These agreements have no expiration date and may be cancelled by either party with 90-days written
notice in the event the property changes ownership.
 
The
Trust also provides the use of the “InnSuites” trademark to the Hotels through the Trust’s wholly-owned subsidiary,
RRF Limited Partnership, at no additional charge.
 
Restructuring
Agreements
 
For
information about the restructuring agreements for Albuquerque Suite Hospitality, Tucson Hospitality Properties, see Notes 3 and
4 of our consolidated financial statements.
 
Financing
Arrangements and Guarantees
 
On
June 30, 2022, the Trust entered a $2,000,000 net maximum Demand/Revolving Line of Credit/Promissory Note with Rare Earth Financial.
The Demand/Revolving Line of Credit/Promissory Note bears interest at 7.0% per annum, is interest only quarterly and matures on June
30, 2024 and automatically renews annually unless either party gives a six-month written advance notice. No prepayment penalty exists
on the Demand/Revolving Line of Credit/Promissory Note. The balance fluctuates significantly through the period with the highest payable
balance being approximately $1,595,000 during the Fiscal Year ended January 31, 2024. The Demand/Revolving Line of Credit/Promissory
Note has a net maximum borrowing capacity of $2,000,000. Related party interest expense or income for the Demand/Revolving Line of Credit/Promissory
Note for the Fiscal Year ended January 31, 2024 was $0 of expense, and for the Fiscal Year ended January 31, 2023 was $17,000 of expense.
 
The
above Demand/Revolving Line of Credit/Promissory Notes are presented together as one line item on the balance sheet and totaled a receivable
of $0 and $0, at January 31, 2024 and 2023, respectively, all of which is considered a current receivable.
 
As
of January 31, 2024, the Trust had a $200,000 unsecured note payable with an individual lender. The promissory note is payable on demand,
or on June 30, 2024, whichever occurs first. The loan accrues interest at 4.5% and interest only payments shall be made monthly. The
Trust may pay all of part of this note without any repayment penalties. The total principal amount of this loan is $200,000 as of January
31, 2024.
 
On
July 1, 2019, the Trust and the Partnership together entered into an unsecured loan totaling $270,000 with an individual investor at
4.5%, interest only, payable monthly. The loan has been subsequently extended to June 30, 2024. The Trust may pay all or part of this
note without any repayment penalties. The total principal amount of this loan is $270,000 as of January 31, 2024.
 

62
 

 
Other
Related Party Transactions
 
The
Trust employs part time, an immediate family member of Mr. Wirth, Brian James Wirth, who provides IT Technology support services to the
Trust, receiving a $37,000 annual salary.
 
Compensation
Information
 
For
information regarding compensation of our executive officers, see Item 11 of this Form 10-K.
 
Review,
Approval or Ratification of Transactions with Related Parties
 
On
December 10, 2013, the Board of Trustees adopted a Related Party Transactions Policy, which established procedures for reviewing transactions
between us and our Trustees and executive officers, their immediate family members, entities with which they have a position or relationship,
and persons known to us to be the beneficial owner of more than 5% of our Shares of Beneficial Interest. These procedures help us evaluate
whether any related person transaction could impair the independence of a Trustee or presents a conflict of interest on the part of a
Trustee or executive officer. First, the related party transaction is presented to our executive management, including our Chief Financial
Officer. Our Chief Financial Officer then discusses the transaction with our outside counsel, as needed. Lastly, the Audit Committee
and the members of the Board of Trustees who do not have an interest in the transaction review the transaction and, if they approve,
pass a resolution authorizing the transaction. In determining whether to approve a Related Party Transaction, the Audit Committee and
the members of the Board of Trustees consider whether the terms of the related party transaction are fair to the Trust on the same basis
as would apply if the transaction did not involve a related party; whether there are business reasons for the Trust to enter into the
related party transaction; whether the related party transaction would impair the independence of the outside Trustee and whether the
related party transaction would present an improper conflict of interest for any Trustee or executive officer of the Trust, taking into
account the size of the transaction, the overall financial position of the trustee, executive officer or related party, the direct or
indirect nature of the Trustee’s, executive officer’s or other related party interest in the transaction and the ongoing
nature of any proposed relationship, and any other factors the Audit Committee and members of the Board of Trustees deem relevant. Our
Related Party Transactions Policy is available in the Corporate Governance portion of our website at www.innsuitestrust.com.
 
Item
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
 
The
following table presents aggregate fees for the Fiscal Years ended January 31, 2024, and 2023, for professional services rendered by
BF Borgers CPA PC:
 


  
2024  
2023 

Audit Fees (1) 
$104,500  
$114,955 

Tax Fees (2) 
 25,750  
 27,000 

Other Fees 
 -  
 - 

Total 
$130,250  
$141,955 

 


 
(1)
“Audit
    Fees” represent fees for professional services provided in connection with the audit of our annual financial statements, review
    of financial statements included in our quarterly reports and related services normally provided in connection with statutory and
    regulatory filings and engagements.

 
 
 

 
(2)
“Tax
    Fees” represent fees for professional services provided in connection with the preparation of our annual Federal and State
    tax returns, additional tax related research and consulting, and related services normally provided in connection with statutory
    and regulatory filings, both at the Federal and State level.

 

63
 

 
The
Board of Trustees has considered whether the provision of non-audit services is compatible with maintaining the principal accountant’s
independence. There were no fees billed by or paid to our independent registered public accounting firm during the Fiscal Years ended
January 31, 2024 and 2023 for tax compliance, tax advice or tax planning services or for financial information systems design and implementation
services. The Trust has decided to retain BF Borgers, to perform the tax return preparation, for tax years 2023 and 2024, for all entities
within the Trust.
 
Policy
on Pre-Approval of Audit and Permitted Non-Audit Services
 
The
Audit Committee pre-approves all fees for services performed by our independent auditors, currently BF Borgers, CPA PC. Unless a type
of service our independent auditors provided received general pre-approval, it will require specific pre-approval by the Audit Committee.
Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee. The term of any pre-approval
is 12 months from the date of pre-approval unless the Audit Committee specifically provides for a different period. Since May 6, 2003,
the effective date of the SEC’s rules requiring Audit Committee pre-approval of audit and non-audit services performed by our independent
auditors, all of the services provided by our independent auditors were approved in accordance with these policies and procedures.
 
PART
IV
 
Item
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 


 
(a)(3)
Exhibit
    List

 
See
the Exhibit Index, which is incorporated herein by reference.
 
Item
16. FORM 10-K SUMMARY
 
None.
 


Exhibit
Number
 
Exhibit

3.1
 
Second Amended and Restated Declaration of Trust of InnSuites Hospitality Trust, dated June 16, 1998, as further amended on July 12, 1999 (incorporated by reference to Exhibit 3.1 of the Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2005, filed with the Securities and Exchange Commission on May 16, 2005).

 
 
 

10.1
 
Second Amended and Restated Agreement of Limited Partnership of RRF Limited Partnership, dated March 24, 2014 (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 26, 2014).

 
 
 

10.2*
 
Form of Indemnification Agreement between InnSuites Hospitality Trust and each Trustee and executive officer (incorporated by reference to Exhibit 10.3 of the Registrant’s Annual Report on Form 10-K/A for the Fiscal Year ended January 31, 2006, filed with the Securities and Exchange Commission on May 12, 2006).

 
 
 

10.3*
 
InnSuites Hospitality Trust 1997 Stock Incentive and Option Plan (incorporated by reference to Exhibit 4(a) of the Registrant’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission on September 18, 2000).

 
 
 

10.5*
 
InnSuites Hospitality Trust 2017 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 31, 2018).

 

64
 

 


Exhibit
Number
 
Exhibit

10.6*
 
Form of Nonqualified Stock Option Agreement under the InnSuites Hospitality Trust 2017 Equity Incentive Plan (incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission on January 31, 2018).

 
 
 

10.7*
 
Form of Restricted Share Agreement under the InnSuites Hospitality Trust 2017 Equity Incentive Plan (incorporated by reference to Exhibit 4.4 of the Registrant’s Registration Statement on Form S-8, filed with the Securities and Exchange Commission on January 31, 2018).

 
 
 

10.21
 
Albuquerque Suite Hospitality LLC Restructuring Agreement, dated August 30, 2010, by and among RRF Limited Partnership, Rare Earth Financial, LLC, InnSuites Hospitality Trust, James F. Wirth, and Albuquerque Suite Hospitality LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2010, filed with the Securities and Exchange Commission on September 3, 2010).

 
 
 

10.22
 
Addendum to Albuquerque Suite Hospitality LLC Amended Restructuring Agreement, dated December 9, 2013, by and among RRF Limited Partnership, Rare Earth Financial, LLC, InnSuites Hospitality Trust, James F. Wirth, and Albuquerque Suite Hospitality LLC (incorporated by reference to Exhibit 10.21 of the Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2016, filed with the Securities and Exchange Commission on April 29, 2016).

 
 
 

10.23
 
Tucson Hospitality Properties LP Restructuring Agreement, dated February 17, 2011, by and among Rare Earth Financial, LLC, RRF Limited Partnership, InnSuites Hospitality Trust, Tucson Hospitality Properties LP, and James F. Wirth (incorporated by reference to Exhibit 10.8 of the Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2011, filed with the Securities and Exchange Commission on April 29, 2011).

 
 
 

10.24
 
Tucson Hospitality Properties LLLP Updated Restructuring Agreement, dated as of October 1, 2013, by and among Rare Earth Financial, LLC, RRF Limited Partnership, InnSuites Hospitality Trust, and Tucson Hospitality Properties LLLP (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2013, filed with Securities and Exchange Commission on December 6, 2013).

 
 
 

10.27
 
Agreement for Purchase and Sale and Escrow Instructions, dated October 15, 2014, by and between Tucson Hospitality Properties, LLLP and Joseph R. Cesare and Hugh M. Caldwell, Jr., acting in his capacity as Trustee of Trust B under the Hugh M. and SallyAnn Caldwell Trust (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 21, 2014).

 
 
 

10.28
 
Deed of Trust, dated November 18, 2014, by and among Tucson Hospitality Properties, LLLP, as Trustor, and Kansas State Bank of Manhattan, as Lender (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 26, 2014).

 
 
 

10.29
 
Promissory Note, dated November 18, 2014, executed by Tucson Hospitality Properties, LLLP, as Borrower, in favor of Kansas State Bank of Manhattan, as Lender (incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 26, 2014).

 
 
 

10.31
 
Promissory Demand Note, dated December 29, 2014, executed by InnSuites Hospitality Trust and RRF Limited Partnership, as Borrowers, in favor of Guy C. Hayden, III, as Lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 5, 2015).

 
 
 

10.32
 
Demand/Revolving Line of Credit/Promissory Note, dated December 1, 2014, executed by InnSuites Hospitality Trust and its affiliates, as Borrowers, in favor of Rare Earth Financial, LLC and its affiliates, as Lenders (incorporated by reference to Exhibit 10.41 of the Registrant’s Annual Report on Form 10-K for the Fiscal Year ended January 31, 2015, filed with the Securities and Exchange Commission on April 30, 2015).

 
 
 

10.35
 
Securities Purchase Agreement, dated November 30, 2015, by and between InnSuites Hospitality Trust and Rare Earth Financial, LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 3, 2015).

 
 
 

10.36
 
Securities Purchase Agreement, dated December 22, 2015, by and between InnSuites Hospitality Trust and Charles Strickland (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 23, 2015).

 

65
 

 


Exhibit
Number
 
Exhibit

10.37
 
Securities Purchase Agreement, dated December 22, 2015, by and between InnSuites Hospitality Trust and Rare Earth Financial, LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 23, 2015).

 
 
 

10.38
 
Line of Credit/Promissory Note, dated December 22, 2015, by and between InnSuites Hospitality Trust, as Lender, and Tempe/Phoenix Airport Resort, LLC, as Borrower, and Line of Credit/Promissory Note, dated December 22, 2015, by and between InnSuites Hospitality Trust, as Lender, and Phoenix Northern Resort LLC, as Borrower (incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 23, 2015).

 
 
 

10.40
 
Securities Purchase Agreement, dated January 28, 2016, by and between InnSuites Hospitality Trust and Guy Hayden, III and Rare Earth Financial, LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 2, 2016).

 
 
 

10.42
 
Business Loan and Security Agreement, dated September 20, 2016, executed by Albuquerque Suite Hospitality L.L.C., as Borrower, in favor of American Express Bank, FSB, as Lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 23, 2016).

 
 
 

10.44
 
Eight Promissory Demand Notes, dated December 5, 2016, executed by InnSuites Hospitality Trust and RRF Limited Partnership, as Borrower, in favor of H. W. Hayes Trust, as Lender, and two Promissory Demand Notes, dated December 5, 2016, executed by InnSuites Hospitality Trust and RRF Limited Partnership, as Borrower, in favor of Lita M. Sweitzer, as Lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 8, 2016).

 
 
 

10.45
 
Business Loan and Security Agreement, dated December 19, 2016, executed by Tucson Hospitality Properties, LLLP, as Borrower, in favor of American Express Bank, FSB, as Lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 21, 2016).

 
 
 

10.48
 
Securities Purchase Agreement, dated February 28, 2017, by and between InnSuites Hospitality Trust and Charles Strickland and Rare Earth Financial, LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 6, 2017).

 
 
 

10.49
 
Securities Purchase Agreement, dated May 4, 2017, by and among InnSuites Hospitality Trust, Rare Earth Financial, LLC and Charles E. Strickland (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2017).

 
 
 

10.53
 
Albuquerque Suite Hospitality Restructuring Agreement – Second Addendum, dated June 19, 2017, executed by InnSuites Hospitality Trust, as Majority Owner, and Rare Earth Financial, LLC, Administrative Member (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on June 22, 2017).

 
 
 

10.54
 
Line of Credit / Promissory Note Change in Terms Agreement, dated June 19, 2017, executed by Tempe/Phoenix Airport Resort, LLC, as Borrower, in favor of InnSuites Hospitality Trust, as Lender (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on June 22, 2017).

 

66
 

 


Exhibit
Number
 
Exhibit

10.55
 
Demand / Revolving Line of Credit / Promissory Note Change in Terms Agreement, dated June 19, 2017, executed by Rare Earth Financial, LLC. as Borrower, in favor of InnSuites Hospitality Trust, as Lender (incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on June 22, 2017).

 
 
 

10.56
 
Line of Credit / Promissory Note Change in Terms Agreement, dated June 19, 2017, executed by Phoenix Northern Resort, LLC, as Borrower, in favor of InnSuites Hospitality Trust, as Lender (incorporated by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on June 22, 2017).

 
 
 

10.57
 
Business Loan Agreement, dated June 29, 2017, executed by Tucson Hospitality Properties, LLLP, as Borrower, in favor of KS State Bank, as Lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 6, 2017).

 
 
 

10.58
 
Securities Purchase Agreement, dated July 10, 2017, by and between InnSuites Hospitality Trust and three individuals and Assignment of Partnership Interest Agreements, dated July 10, 2017, by and between RRF Limited Partnership and five individuals (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 10-K filed with the Securities and Exchange Commission on July 13, 2017).

 
 
 

10.59
 
Three Promissory Note Agreements, dated July 10, 2017, by and between InnSuites Hospitality Trust and three individuals and Five Promissory Note Agreements, dated July 10, 2017, by and between RRF Limited Partnership and five individuals (incorporated herein by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 13, 2017).

 
 
 

10.60
 
Revolving Line of Credit – Promissory Demand Note, dated July 18, 2017, by and between InnSuites Hospitality Trust and RRF Limited Partnership and Chinita Hayden, as Lender, and Promissory Demand Note – Amendment # 1, dated July 18, 2017, between RRF Limited Partnership and Guy Hayden, III, as Lender (incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2017).

 
 
 

10.61
 
Promissory Note, dated August 24, 2017, executed by InnSuites Hospitality Trust, as Borrower, in favor of RepublicBankAz, N.A., as Lender (incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 5, 2017).

 
 
 

10.63
 
Business Loan Agreement, dated October 31, 2017, by and between Tucson Hospitality Properties LLLP, as the Borrower, and Republic Bank of Arizona, as the Lender (incorporated herein by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 2, 2017).

 
 
 

10.64
 
Business Loan Agreement, dated October 31, 2017, by and between Albuquerque Suite Hospitality LLC, as the Borrower, and Republic Bank of Arizona, as the Lender (incorporated herein by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 2, 2017).

 
 
 

10.65
 
Purchase and Sale Agreement by and between 102037739 LTD and Rare Earth Limited Partnership (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 21, 2018).

 

67
 

 


Exhibit
Number
 
Exhibit

11.05
 
Appointment of CFO Sylvin R, Lange by InnSuites Hospitality Trust (Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers on Form 8-K, filed with the Securities and Exchange Commission September 9, 2020).

 
 
 

21
 
Subsidiaries of the Registrant.

 
 
 

22
 
Consent of BF Borgers, CPA PC

 
 
 

31.1
 
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 
 
 

31.2
 
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 
 
 

32.1**
 
Certification of Chief Executive Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.

 
 
 

32.2**
 
Certification of Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.

 
 
 

101
 
Inline
    XBRL Exhibits

 
 
 

101.INS
 
Inline
    XBRL Instance Document.

 
 
 

101.SCH
 
Inline
    XBRL Schema Document.

 
 
 

101.CAL
 
Inline
    XBRL Calculation Linkbase Document.

 
 
 

101.LAB
 
Inline
    XBRL Labels Linkbase Document.

 
 
 

101.PRE
 
Inline
    XBRL Presentation Linkbase Document.

 
 
 

101.DEF
 
Inline
    XBRL Definition Linkbase Document.

 
 
 

104
 
Cover
    Page Interactive Data File (embedded within the Inline XBRL document)

 


 
*
Management
    contract or compensatory plan or arrangement.

 
 
 

 
**
Furnished
    herewith (not filed)

 

68
 

 
SIGNATURES
 
Pursuant
to the requirements of Section 13 or 15(d) of Securities Exchange Act of 1934, as amended, the Trust has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
 


 
INNSUITES
    HOSPITALITY TRUST

 
 

Dated:
    April 8, 2024
By:
/s/
    James F. Wirth

 
 
James
                                            F. Wirth, Chairman and
Chief
    Executive Officer
(Principal
    Executive Officer)

 
 
 

Dated:
    April 8, 2024
By:
/s/
    Sylvin Lange

 
 
Sylvin
                                            Lange, Chief Financial Officer and Director of Finance
(Principal
    Financial and Accounting Officer)

 
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on
behalf of the Trust and in the capacities and on the dates indicated.
 


Dated:
    April 8, 2024
By:
/s/
    James F. Wirth

 
 
James
                                            F. Wirth, Chairman and
Chief
    Executive Officer
(Principal
    Executive Officer)

 
 
 

Dated:
    April 8, 2024
By:
/s/
    Sylvin Lange

 
 
Sylvin
                                            Lange, Chief Financial Officer and Director of Finance
(Principal
    Financial and Accounting Officer)

 
 
 

Dated:
    April 8, 2024
By:
/s/
    Marc E. Berg

 
 
Marc
    E. Berg, Trustee

 
 
 

Dated:
    April 8, 2024
By:
/s/
    Steven S. Robson

 
 
Steven
    S. Robson, Trustee

 
 
 

Dated:
    April 8, 2024
By:
/s/
    Les Kutasi

 
 
Les
    Kutasi, Trustee

 
 
 

Dated:
    April 8, 2024
By:
/s/
    JR Chase

 
 
JR
    Chase, Trustee

 

69

 



